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By Peter Murphy and Nelson Bocanegra
BOGOTA, Dec 23 (Reuters) - Colombia cut its economic growth target for 2015 to 4.2 percent, President Juan Manuel Santos said on Tuesday, down from 4.8 percent previously, as lower crude oil prices cut government revenues from the country's top export.
The million-barrel-per-day producer expects to see typical government earnings from oil slashed by $3.9 billion in 2015, or nearly 30 percent, due to a recent plunge in crude prices, cash it will replace through a new tax reform and extra borrowing.
"Today Colombia's crude oil is valued at $50. This is almost half what we had been thinking," Santos said, referring to prior economic projections based on an oil price of $97 per barrel.
"These circumstances will cause the Colombian economy to grow a little less next year, in 2015, compared with this year," he said during a press conference to announce the new figures.
Santos said the central government deficit for 2015 was now expected to be 2.8 percent, up from 2.4 percent previously forecast. That was within the requirements of the fiscal law and spending would be cut if required, Santos said.
The government increased its target for foreign dollar-denominated bond issues in 2015 to $3.5 billion from the $3 billion estimated in June.
Colombia has sustained annual growth above 4 percent since 2010 and this year's growth would be the highest in the region, Santos said. Relatively low inflation has enabled policymakers to maintain economic stimulus and avoid interest rate hikes.
Santos said financial obligations for 2015 have been eased by the swapping of local bonds coming due next year for others which will expire later.
He said roughly half of the reduction in government income next year from oil would be made up for through extra income generated by a tax reform passed last week and the other half through a larger deficit.
"Public finances are well prepared," Santos said.
Though prices for Colombia's second-most valuable commodity, coal, failed to pick up in 2014, Santos said recently this was the best-ever year for the country's large coffee sector, with higher prices, large production and a weaker currency boosting farmers' earnings in pesos. (Reporting by Carlos Vargas, Monica Garcia and Nelson Bocanegra; Writing by Peter Murphy; Editing by Meredith Mazzilli)