Colombia's Congress approves $80 bln budget for 2018

BOGOTA, Oct 18 (Reuters) - Colombia's congress approved an $80 billion budget for 2018 on Wednesday, a 1 percent increase over this year's spending, as the government seeks to retain the country's 'BBB' credit rating.

Policymakers have been grappling for over two years with the twin pressures of a weak economy, caused by the global drop in oil prices, and inflation that at one point last year was more than double the bank's 2 percent to 4 percent target range.

Education will benefit most in the 235.5 trillion peso plan, with funding of 37 trillion pesos, followed closely by the defense sector with 31 trillion pesos.

The country will also spend 2.4 trillion on post-conflict projects, as it continues to implement a peace deal with the Revolutionary Armed Forces of Colombia (FARC) rebel group.

The plan is the final budget for the administration of President Juan Manuel Santos, who will leave office in August 2018.

The government considers the plan to be an austerity budget, a bid to reduce spending amid falling growth, which it says will reach 2 percent this year.

Ratings agencies and analysts are less optimistic however and see a high probability that the country may not meet its goals. Respondents in a recent Reuters survey estimated growth of only 1.6 percent.

The government is aiming for a fiscal deficit of 3.1 percent in 2018, down from the 3.6 percent expected for this year.

($1 = 2,944.27 Colombian pesos) (Reporting by Carlos Vargas and Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Lisa Shumaker)