UPDATE 2-Canada current account swings into deficit

(Adds analysts, market reaction)

By Louise Egan

OTTAWA, Feb 27 (Reuters) - Canada's current account plunged into deficit in the fourth quarter for the first time in nearly a decade as the global financial crisis crippled demand for oil and other natural resources exported by the country.

Statistics Canada reported a current account deficit of C$7.49 billion ($5.94 billion), which was bigger than the C$4.85 billion deficit forecast by analysts in a Reuters poll. Statscan also revised down the third-quarter surplus to C$3.63 billion from C$5.64 billion previously.

"Clearly some pretty devastating figures here," said Eric Lascelles, chief economics and rates strategist at TD Securities.

"And, of course, from a broad market perspective it's the fact that we are firmly in twin deficit territory that speaks to some of the woes befalling Canada," he said.

The last time Canada had a deficit in its current account was in the second quarter of 1999. This year, Canada is also set to fall into a fiscal deficit for the first time in over a decade, as the government pours money into infrastructure projects and tax breaks to stimulate growth.

The Canadian dollar turned slightly weaker after the data.

The current account data is expected to be followed on Monday by the first concrete evidence that Canada has fallen into recession. Analysts expect data on fourth-quarter gross domestic product to show a contraction of 3.6 percent, the worst since 1991.

In the current account, the goods surplus fell to its lowest level since the first quarter of 1994, to C$3.73 billion from C$14.31 billion in the previous quarter, as exports for energy products plummeted 27 percent. Exports of metals and automotive products also posted hefty declines.

Imports weakened by a lesser amount, also due to energy prices. Imports of autos slumped to a decade low.

The investment income deficit increased in the quarter to C$5.58 billion as investors received less from their portfolio investments while payments were up.

Economists say the prospects for digging out of the current account deficit any time soon were not promising.

"I think we're in for a prolonged period of deficits here in Canada," said Doug Porter, deputy chief economist at BMO Capital Markets.

"I don't think this is a one-quarter wonder," he said. (Additional reporting by Toronto Treasury Desk)