Reuters) – Colombia expects lower fiscal deficits in 2013 than in 2012, while economic growth is projected at 4.8 percent for both years, Finance Minister Juan Carlos Echeverry said on Thursday.

Latin America’s No. 4 oil producer has seen a strong recovery from the global economic crisis, recouping three investment-grade credit ratings and continuing to reap strong inflows in the mining and oil sectors.

Presenting the latest fiscal plan, Echeverry said the government had revised down the 2012 central government fiscal deficit target to 2.4 percent of gross domestic product from 2.8 percent previously, and the consolidated deficit to 1.2 percent of GDP from 1.8 percent. The consolidated deficit includes the central and regional governments.

The central government deficit target is seen at 2.2 percent of GDP in 2013, with the consolidated deficit at 1 percent.

“This fiscal plan is serious, reasonable, we’re not extracting liquidity from the economy, but injecting liquidity into the economy,” Echeverry told reporters.

The government expects the economy to grow 4.8 percent this year and next. Economic expansion was 5.9 percent in 2011, the fastest growth rate in four years, helped by high foreign investment and strong consumer spending growth.

Colombia has attracted billions of dollars in foreign direct investment over the past decade, mostly into the oil and mining sectors after U.S. military aid helped security forces deal crippling blows to leftist guerrillas and cocaine cartels.

Consumer prices have remained at steady levels in recent months, and economists expect 2012 annual inflation to fall within the central bank’s target of 2 percent to 4 percent.

The fiscal plan forecasts full-year inflation at 3 percent this year and next.

The government will issue $2 billion in global bonds next year, while it lowered this year’s issuances to $2 billion, down from $3 billion previously, Echeverry said. The government has so far issued $1.5 billion in bonds in 2012.

Colombia expects to sell 28 trillion pesos ($15.7 billion) worth of local TES bonds in 2013, of which 23 trillion pesos will be at auction.

Echeverry also said Colombia would stick to plans to issue 24.76 trillion pesos in TES bonds in 2012, but lowered the amount it would sell at auction to 17.36 trillion from 18.36 trillion previously.

PUBLIC WORKS DATA HIT GROWTH ESTIMATES

Economic policymakers are concerned that continued credit expansion could pressure consumer prices while the peso currency has become the biggest gainer among the world’s 36 most-traded currencies this year, firming more than 8 percent.

An unexpected fall in public works spending in the first quarter forced the government to lower growth estimates.

At an economic conference earlier on Thursday, Echeverry forecast first-quarter expansion at 4.5 percent, down from 4.8 percent previously, due to the poor data.

Colombia, Latin America’s fourth-largest economy, hoped that investment in reconstruction after heavy rains damaged roads and bridges over the last few years would help fuel growth in 2012.

“It’s a difficult year,” Echeverry said. “These are not outlandish numbers, they are quite reasonable numbers, if we are in that neighborhood we should be very well served,” he added, referring to growth outlooks for the first quarter and 2012.

Echeverry said Colombia was prepared to implement countercyclical monetary policies to foster growth if needed.

The central bank has kept the benchmark interest rate steady at 5.25 percent in its past three policy meetings after a yearlong, 225-basis-point rise that has helped cool inflation in one of the region’s fastest-growing economies.

At the policy meeting late last month, the bank said recent events in Europe had increased the risk of a strong recession there, adding uncertainty to the growth forecasts in Colombia.

“If required, the monetary and fiscal policy will be countercyclical. The central bank board has spoken about the capacity to have a major policy change if it is needed, God forbid it,” Echeverry said.

“If things outside get complicated, monetary policy can change … in terms of liquidity in the economy; we have the capacity without risking inflation,” he said.