December 2, 2019 / 9:32 PM / 10 days ago

Colombia current account deficit jumps 4.3% through September

BOGOTA, Dec 2 (Reuters) - Colombia’s current account deficit jumped to 4.3% of gross domestic product between January and September, the central bank said on Monday, attributing the rise to foreign companies sending funds back home and a larger trade deficit.

The deficit was equivalent to $10.39 billion and was greater than the 3.75% of GDP reported in the first nine months of 2018, when the deficit reached $9.29 billion, the central bank said in a statement.

Current accounts track a country’s net international trade and foreign investments.

During the first nine months of the year, direct foreign investment picked up by 25.1% to $10.82 billion, compared to the same period in 2018.

Some 36.2% of the foreign investment in Latin America’s fourth largest economy was destined for the mining and oil sectors, while 23.1% went to financial and business services.

Around 13.3% of investment went to manufacturing, while 7.2% went to the commerce and hospitality sectors, among others.

At the same time, remittances sent by Colombians living abroad rose 9.6% between January and September to just under $5 billion, compared with the first nine months of 2018.

The central bank projects that the country will end the year with a current account deficit of 4.5% of GDP, with the figure rising to 4.6% of GDP in 2020.

The deficit is considered one of the country’s chief economic concerns, along with maintaining its credit ratings and balancing inflation that is above the bank’s target rate with a desire for higher growth. (Reporting by Nelson Bocanegra Writing by Oliver Griffin Editing by Alistiar Bell)

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