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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.
Colombia's trade balance deficit widened to $449.6 million in the course of the year through September, from a $66.2 million deficit in the same period last year.
"If you believe that internal demand is going to increase more than GDP again and also that there will be a fall in the trade balance, that would mean a deterioration in the current account", said Juan Pablo Zarate, a central bank board member, at the forum.
Capital may also leave the country as investors seek markets with higher yields, on the expectation that the central bank will raise interest rates in the second half of 2015.
"We probably won't just have fewer entrances of capital, but net exits," said Alejandro Reyes of Ultrabursatiles.
$1 = 2,293.47 Colombian pesos Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Alexandra Ulmer, Bernard Orr