Colombia to face fiscal deficit, current account pressures in 2015 -analysts

miércoles 3 de diciembre de 2014 20:11 GYT

By Nelson Bocanegra

BOGOTA Dec 3 (Reuters) - Colombia's fiscal and current account deficits are poised to widen next year, as a drop in oil earnings pushes the country to issue more debt internationally, analysts predicted on Wednesday.

The fiscal deficit in 2015 will be above the government's target of 2.4 percent of gross domestic product (GDP), the majority of analysts at a forum hosted by financial company Corficolombiana estimated, while a tax reform package the government is championing in Congress is not seen compensating for oil losses.

The government may modify its targets in the coming weeks to reflect slumping crude earnings in its traditional year-end revision of financing plans, some analysts said.

Oil is the biggest source of foreign exchange for the country.

"The calculations that we've been given are that with lower oil prices the deficit will be between two and three trillion pesos ($870 million to $1.3 billion) more than expected," said Andres Pardo, chief economist at Corficolombiana.

"We think it makes sense to issue more debt externally," Pardo said, "Colombia could right now easily issue bonds, not only in dollars but in euros and yen."

In addition to the impact of low crude prices, Latin America's fourth-largest economy will also be hit by a $2 billion fall in foreign direct investment in the oil sector, Munir Jalil, Citibank's chief economist for Colombia said, increasing the current account deficit.

The current account deficit was up to 4.4 percent in the first half of the year, from 3.4 percent in 2013, due to a decline in exports at a time when imports are going strong on the back of increased domestic consumption.   Continuación...