He emphasised that the change did not mean that the budget would be cut (it stands at US$6.7bn for 2003), but that spending would be switched around. He said that the change would produce the money needed to meet the recent pay award for the teachers, which had been costed at US$30m.
The key issue for the economy is the effect that the new heavy crude oil pipeline (OCP) will have on oil exports. The OCP is due to come onstream in September, at which point the state oil company expects to switch heavy oil, which has been clogging up the existing pipeline, the SOTE, to the OCP. This should free enough capacity on the SOTE to allow a sharp increase in production, perhaps even its doubling.
The government's targets for this year are growth of 3%, rising to between 5.5% and 6% in 2004, Pozo said. He expects the country to have produced 152m barrels of oil this year (416,000bpd).
* Colombia's GDP should grow this year by about 2.5% according to BBVA-Banco Ganadero. The bank had previously forecast a rate of 2%, but upgraded it after figures for the first quarter showed growth of 3.82%. The bank also noted that unemployment has been shrinking: the May rate of 13% was 2.3 points lower than a year earlier.
Another encouraging sign was the number of building starts in the labour-intensive construction industry; in the first quarter they were 12.4% higher than in the same period of 2002. Indeed, overall construction activity is estimated to have increased by 15.8% year-on-year in the first quarter.
* Bolivia's GDP in the first quarter of the year was up 1.37% on the same period of 2002 -but only if measured in local currency; in dollars it contracted by almost 7%, according to figures just released.
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