Colombia | 2023 current account deficit was the lowest in 13 years

The year 2023 closed with a current account deficit that represented 2.7% of GDP, 3.5 pps less than that recorded in 2022. This deficit is the lowest observed since 2010 and was accompanied by the largest drop in goods imports recorded (excluding the pandemic year) since 2001.

Key points

• Key points:
• The reduction in the deficit was partly explained by the adjustment in the trade balance, which went from representing 4.8% of GDP in 2022 to 2.3% in 2023. This sharp closing of the deficit was largely explained by a 15.2% annual decrease in imports. Exports fell by 7.3% annually, explained by the decline in international prices of traditional products.
• The deficit in primary income represented 4.0% of GDP, reducing by 1 pps with respect to 2022, explained by lower outflows in capital participation income and dividends.
• Secondary income, which includes current transfers between entities and remittances, was an important financier of the trade deficit, maintaining its share of GDP stable (3.6%).
• Foreign direct investment grew by 1.5% per year over 2022, represented 4.9% of GDP and was enough to more than proportionally finance the current account deficit.
• In the future, the recovery of domestic demand is expected to put upward pressure on imports and the improved dynamics of the economy is expected to lead to higher factor income outflows, which together will again put upward pressure on the current account deficit.

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