June 1, 2020 / 6:51 PM / a month ago

Colombia current account deficit shrunk to 3.7% of GDP in first quarter

BOGOTA (Reuters) - Colombia’s current account deficit shrunk to 3.7% of gross domestic product in the first quarter, due to a lower rate of foreign investment outflow and higher remittances from workers outside the country, the central bank said on Monday.

The deficit between January and March was equivalent to $2.7 billion, below the $3.5 billion in the same period the year before, when it was equivalent to 4.5% of GDP.

The current account of the balance of payments is a broad measure of transactions between the country and the rest of the world. It encompasses trade, interest payments, dividends, remittances and services like tourism.

The decrease in the deficit is due to less outflow of profits and dividends of companies with foreign direct investment, as well as a 14% increase in remittances, the bank said in a report.

Foreign direct investment arriving to Colombia in the first quarter was up 6% to $3.59 billion compared to the same period the year before.

Some 30.7% of investment destined for Latin America’s fourth-largest economy went to the mining and oil industries, 18.6% to the electricity sector and 13.8% was designated for financial and professional services. Manufacturing got 9.2% and the commerce and hospitality sector received 8%.

Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Cynthia Osterman

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