* Economy grew 4.5 pct in 2nd quarter, 4.3 pct in 1st half
* Second-quarter growth 1 pct from 1st quarter
* Central bank meets on Friday on interest rates (Adds details, background, byline)
By Nelson Bocanegra and Jack Kimball
BOGOTA, Sept 23 (Reuters) - Colombia said on Thursday its economy grew 4.5 percent in the second quarter of this year from a year earlier, a smaller expansion than expected for the Andean nation but still a sign of solid recovery.
A second quarter of strong growth for Latin America's No. 4 oil producer shows the country's economy has rebounded after being hit by the global financial crisis last year as well as by a trade dispute with neighboring Venezuela.
The lower-than-expected growth will give Colombia's central bank, which holds its monthly policy meeting on Friday, more reason to keep its benchmark interest rate at 3 percent to keep up stimulus of the economy. For details see [ID:nN20274631].
The average forecast in a Reuters poll of 40 analysts was for gross domestic product growth of 5.42 percent. [ID:nN17260303]
After the data was released Colombia's peso
"The market is seeing less growth meaning less inflationary pressure. Any GDP figure above expectations would generate more pressure," said Julian Cardenas, chief of economic studies at Corredores Asociados.
Colombia's year-on-year second-quarter growth falls shy of the 11.8 percent registered by Argentina, fueled by the farming sector, and 8.8 percent for Brazil in the same period, driven by investment and demand. [ID:nN03239813] and [ID:nN17177535]
ALL EYES ON CURRENCY
Growth fell 0.2 percent in the second quarter of 2009, the DANE statistics agency said. It said 2010 first-half growth was 4.3 percent. The agency marginally revised down first-quarter growth to 4.2 percent from 4.4 percent posted previously.
DANE said quarterly growth was driven in part by the mining and quarries sector, which increased nearly 15 percent in the April-June period versus a year earlier due to a rise in the value of oil, natural gas, coal and metals.
Manufacturing rose 8.4 percent while commerce, restaurants and hotels grew 5.4 percent and transport, storage and communications increased 4.2 percent, it said, although construction fell 5.6 percent.
In the first half of 2010 compared with the same period last year, mining and quarries grew 14.3 percent, manufacturing went up 6.5 percent, and commerce, restaurants and hotels grew 4.9 percent, the statistics body said.
For the full report in Spanish click on http://www.dane.gov.co/
Foreign investment in oil and mining has boomed as Colombia's decades-long guerrilla conflict ebbs. As well as oil it also exports coal, coffee, flowers and nickel.
High growth rates and strong investment inflows have seen Colombia, like other Latin American economies, contend with appreciation of its peso currency, angering exporters.
Colombia's central bank recently resumed dollar purchases to ease the strengthening of the peso, which has risen around 12 percent against the U.S. dollar so far this year. [ID:nN15145483]
Other Latin American nations are also acting to fight appreciation -- regional powerhouse Brazil is aggressively buying dollars, Peru is tightening deposit requirements and Chile has warned it may have to intervene. [ID:nTOE68F05F]
"The disappointing Q2 2010 real GDP figures imply the central bank is likely to remain on hold until sometime during 2011 ... and also likely to be less tolerant than otherwise toward (the peso's) strength," said Alberto Ramos of Goldman Sachs in a note. (Editing by Patrick Markey and Editing by James Dalgleish)