Ecuador 2008 Inflation Seen Above 5% - Fin Min

QUITO -(Dow Jones)- Ecuadorean Finance Minister Fausto Ortiz Tuesday raised his 2008 inflation forecast to above 5% from a previous 3.7%.

"The inflation around the world forces us to review our inflation goal," Ortiz said at a press conference.

Ecuador's consumer price index rose 6.56% over the 12-month period through March and the accumulated CPI growth between January and March was 3.61%.

Food prices in Ecuador rose sharply in the first months of this year as the worst floods the Andean nation had seen in decades disrupted the supply of food.

Ortiz also said the government plans to sell $700 million in domestic debt by the fourth quarter to ensure the government has enough cash next year.

Ortiz said the Andean country's gross domestic product is likely to expand by more than 4% in 2008.

Public spending and oil output will be main drivers of Ecuador's economy in 2008, Ortiz said.

In 2008, the government plans to spend about $4.86 billion for hydroelectric and oil projects, as well as for improving roads.

The country's oil output will rise 8% in 2008 from the previous year, Ortiz said without elaborating.

-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; mercedes.alvaro@ dowjones.com

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