LIMA, Feb 18 (Reuters) - Peru's economy should grow 6.3 percent in 2013 with 'upside risks' for faster expansion, Finance Minister Luis Miguel Castilla said on Monday.

Growth for all of last year was also 6.3 percent, according to official data released last week, one of the quickest paces in Latin America.

But output in December was weaker than expected, growing just 4.3 percent from the same period a year ago because of holidays, rains and a temporary ban on commercial fishing.

Castilla told members of Peru's foreign press club at his office that the December slowdown was temporary and that the economy should bounce back to grow 7 percent in January from the same period a year ago.

He said that a previously announced foreign debt prepayment program of $1.8 billion would be carried out in the next four weeks. Additionally, the finance ministry plans to buy $1.2 billion on the spot foreign exchange market this year to put in its fiscal stabilization fund and another $1 billion for normal debt service.

The $4 billion in purchases are being made to help curb appreciation in the sol currency and Castilla said he is working with the central bank to avert excessive currency strengthening that could hurt Peru's terms of trade. The sol is trading near a 16-year-high of about 2.57 per U.S. dollar.

He mentioned that despite the country's strong economic performance 'it cannot let its guard down' and should carry out reforms this year of the civil service, capital markets, and the health and welfare systems to make the Andean country more competitive.

(Reporting by Terry Wade and Teresa Cespedes; Editing by James Dalgleish) Keywords: PERU ECONOMY/GDP

(terry.wade@thomsonreuters.com)(+51 1 221 2134)(Reuters Messaging: terry.wade.thomsonreuters.com@thomsonreuters.net)

COPYRIGHT

Copyright Thomson Reuters 2013. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.