Balance of payments

At the end of the first quarter of the year 2000, the Colombian balance of payments decreased substantially in its Current Account deficit, passing from US$685 million (3.0% of the quarter’s GDP) in 1999, to US$185 million (0.9% of the quarter’s GDP) in 2000. The primary reason for this reduction was the accelerated growth of exported goods (28.7%), in contrast to that of imports (10.6%). To a lesser extent, the reduction was also due to greater net transfers (14.0%). On the other hand, the capital and financial accounts registered a US$60 million net capital outflows in their net capital outflows, in contrast to net capital inflows of US$625 million during the same period of 1999. This significant adjustment was due to reduced long-term capital inflows (US$733 million) and to the increase of short term net capital outflows (US$46 million). The decrease of long term capital flows was due to the reduction of portfolio and direct foreign investment and to the decrease of the private sector’s external debt. Conversely, the increase of short-term capital outflows is explained by the growth of portfolio investment abroad and by the reduction of the financial sector’s short-term indebtedness. International reserves decreased from US$8.8 billion in 1999 to US$8.3 billion in March 2000. This is the equivalent of 9.2 months of goods’ imports, 7.2 months of goods' and services’ imports, and 2.2 times the short-term external debt balance.

BALANCE OF PAYMENTS 1/
(US$ millions)