MENDOZA, Argentina, March 23 (Reuters) - Uruguay is planning to tap the global debt markets "imminently" and expects to sell bonds in foreign currency in 2018 after sticking to the local currency market last year, Finance Minister Danilo Astori said in an interview on Friday.
Astori, who is considering running for president of the small South American country next year, said the economy would expand 3 percent this year, up from 2.7 percent in 2017, thanks partly to the re-start of state-run oil company Ancap's refinery, which underwent maintenance in 2017.
"A significant part of the manufacturing industry will have extraordinary growth," Astori told Reuters on the sidelines of the Inter-American Development Bank's annual meeting in Mendoza, Argentina.
He said the 2017 growth figure, published on Thursday by the central bank, was slightly below the government's projection for 3 percent, but noted that it was higher than its initial expectation for 2.5 percent.
For 2018, Astori said recently announced incentives for investment and the "reversal" of a drought in the beef- and soy-exporting country would help growth, providing revenue to reduce the fiscal deficit to 2.5 percent of gross domestic product (GDP) by the end of President Tabare Vazquez's term.
The deficit is currently 3.5 percent of GDP. Vazquez's Broad Front government, which has increased spending on social programs, will be "cautious" with spending when it presents its final budget proposal in June, Astori said.
"In Uruguay, it is not easy because the percentage of non-discretionary spending is much higher than discretional spending, but we are emphasizing a prudent approach to spending," Astori said.
To start covering its $2.7 billion bond financing needs this year, Astori said Uruguay will tap debt markets "in the coming days." He declined to give further details. He added that the government would swap existing bonds for longer-duration debt this year.
Astori, who has previously run for president and served as vice president from 2010-2015, said he would decide whether to run after this year's soccer World Cup in July. He would have to resign his current post to be a candidate in the October 2019 vote.
"It is a job I would like to do," he said. "But even though I would like to, and am willing to do it, the collective conditions have to exist to make it possible."
(Additional reporting by Malena Castaldi in Montevideo; Writing by Luc Cohen; Editing by Richard Chang)