Chile's Pinera Sees 5 pct Growth in 2010-daily

May 23 (Reuters) - Chile's President Sebastian Pinera expects the world's top copper producer to grow 5 percent this year despite a devastating earthquake and fears Europe's woes could hamper global recovery, he told a local daily in an interview published on Sunday.

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Pinera, a billionaire conservative who took office in March, told La Tercera he expected the Chilean economy to expand 6 percent in 2011.

"Of course the (European) crisis could affect us, but beyond these specific instances the world is recovering from the financial crisis and growing with strength again," he was quoted as saying.

"I see a promising external panorama and I'm convinced we are doing things right in Chile."

Pinera's growth forecast marks an upward revision from the last prediction of below 5 percent expansion this year by Finance Minister Felipe Larrain in March. 

A Feb. 27 earthquake that ravaged cities and key industries in south-central Chile pushed the government to review its forecast for the year. The central bank also cut its growth estimate to a range of 4.25 percent to 5.25 percent this year from its previous 4.5 percent to 5.5 percent expansion.

Chile's gross domestic product shrank 1.5 percent in the first quarter of the year versus the fourth quarter of 2009, but grew 1 percent on an annual basis.

Global market fears that Europe's debt woes could hamper world economic growth has hurt Chile's peso CLP=CL, stocks .IPSA and the price of copper, the country's main export.

Although post-quake reconstruction efforts are seen helping boost the economy and strengthen the peso this year. 

In his first presidential address to the nation on Friday, Pinera reiterated his vow to boost the economy to 6 percent annually in average over his four-year term.

Pinera is moving to raise taxes on mining and other big companies, sell sovereign debt abroad and tap copper-boom savings to help finance the state's $8.4 billion share of reconstruction after the disaster caused an estimated $30 billion hit to the economy.

Some economists and even political allies worry Pinera's move to raise taxes could curb investment in Latin America's most stable economies.

In a sign of an improved economy, the central bank is widely seen raising its key interest rate 25 basis points in June from a historic low of 0.5 percent, betting on a recovery from the quake and global financial crisis.