BOGOTA: Colombia's current account deficit shrank to 3.3% of gross domestic product (GDP) last year, the central bank said, amid lower capital outflows on profits from foreign investment and a smaller foreign trade deficit.

The deficit in 2019 was 4.4% of GDP, equivalent to some $14.3 billion, while the 2020 figure was equivalent to $9.08 billion.

The lower deficit last year was also explained by the entrance of $8.28 billion in net payouts of loans and other external credits, as the country's indebtedness grew during the COVID-19 pandemic, the central bank said late on Monday.

Incoming foreign direct investment fell 46.3% last year to $7.69 billion, compared to the year before.

Some 28% of that investment went to business and financial services, 23% to mining and oil, 11% to retail and hotels, 10% to electricity, 8% to manufacturing and the remainder to other sectors.

During 2020 some $11.6 billion in Colombian capital went abroad, a significant increase over the $375 million recorded in 2019.

In the fourth quarter the current account deficit was up to 4.1% of GDP, equivalent to $3.11 billion, from 2.6% of GDP in the third quarter of the same year.

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.

Colombia's economy contracted 6.8% in 2020, but the government expects a recovery to growth of 5% this year.