Published on Friday, December 15, 2023

Colombia | The external deficit was reduced but for the reasons we like the least

In the third quarter, the current account deficit continued to narrow and reached 1.68 billion dollars, representing 1.7% of GDP. Nevertheless, the reasons for this closing are not as good as others: they respond to the process of contraction that domestic demand has undergone so far this year.

Key points

  • Key points:
  • The main driver behind the closing of the current account deficit was the 67.1% year-on-year reduction in the trade deficit (the difference between exports and imports) compared to the same quarter of 2022, from 5.1% to 1.5% of GDP.
  • The fall in investment, lower consumption of durable goods and lower demand for intermediate goods have led to a sharp decline in imports. Imports of capital goods (associated with investment) and of raw materials and intermediate goods (associated with production and domestic demand) have fallen by 22.4% and 24.5%, respectively.

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