July 29, 2016 / 10:58 PM / a year ago

UPDATE 1-Colombia 2017 budget to grow 6.6 pct to $72.6 bln -minister

(Adds confirmation, figures from finance minister)

By Carlos Vargas

BOGOTA, July 29 (Reuters) - Colombia's government will seek congressional approval for a 2017 budget that is 6.6 percent more than this year's, Finance Minister Mauricio Cardenas said on Friday, mainly to repay debt.

The national budget would grow to 224.4 trillion pesos ($72.6 billion) next year, from 210 trillion this year, he said at a news conference.

Under the plan, debt servicing costs would rise 15.1 percent to 54.3 trillion pesos because the peso currency has fallen 8.3 percent in the past 12 months. Pensions, education and the defense, labor and health sectors would also be major areas for spending.

"This budget reflects Colombia's new fiscal realities and does so in a way that maintains an intelligent austerity policy - doing more with less," Cardenas said.

Investment in social spending would fall by 10.3 percent to 32.9 trillion pesos.

Colombia's economy, battered by a global fall in oil prices, is set to expand 2.5 percent this year, according to analysts and the International Monetary Fund. The government, however, predicts growth of 3 percent.

Congress has until mid-October to vote on the plan. ($1 = 3,091.78 Colombian pesos) (Reporting by Carlos Vargas; Writing by Julia Symmes Cobb and Nelson Bocanegra; Editing by Richard Chang)

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