The Colombian economy continues to depend on external resources to keep its accounts afloat, according to the most recent report of the Bogotá Bank on the balance of payments, which shows how, despite the fact that the deficit of current account was already known, what worries is the way in which it is being financed.
According to these analysts, it is not favorable that this line progresses by resorting to the debt and with portfolio capitals, two sources that, although they offer liquidity in the short term, also expose the country to volatility risks.
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In this document, the analysts of the Economic Research team confirm that in the second quarter of 2025 the current deficit was 2.5% of GDP, a point higher than in the same period last year; Although the novelty of the analysis is not so much the figures, but the sentence that the country continues to spend more than it produces and how to cover that excess is increasingly dependent on external resources that are not always stable.
The pulse between imports and exports
One of the reasons for the deterioration in the current account has to do with commercial dynamics, since while imports grew 8% in the quarter, exports fell 3% and behind that behavior There is the rebound for household consumption and the greatest purchase of energy and consumption goods.
Colombia should look for other ways to finance the current account deficit.
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“Gasolines, cell phones and yellow corn headed the import list. There is also a jump in solar panel purchases, which increased 244%, and liquefied natural gas, which rose 47%,” says the report.
Thus, for the bank of Bogotá, “these data show two sides of the economy, On the one hand, the reactivation of domestic demand, with homes that spend more; on the other, the energy transition, which begins to be reflected in foreign trade figures ”.
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In contrast, they report that exports had poor performance in which oil sales collapsed 29% and coal 27%, which explains a good part of the bump. In the midst of those falls, there were some lights on behalf that coffee grew 64%, 9%gold and 12%bananas. However, these increases failed to compensate for the loss of income from fossil fuels, which still represent an important fraction of the country’s external income.
Deficit shock absorbers
The report indicates that the deficit in the services account managed to moderate thanks to greater income from tourism and transport, since the arrivals of foreign visitors increased 11%, while the Air transport, especially flowers and specialty coffees, provided additional currencies.
Colombia should look for other ways to finance the current account deficit.
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Even more relevant was the behavior of remittances, which reached a historical maximum of US $ 3,277 million in the quarter, with an annual growth of 13%. This flow of money sent by Colombians abroad is consolidated as one of the main sources of foreign exchange for the country, even surpassing several export products.
While the current account deficit of 2.5% of GDP is not the highest in the country, What generates concern is the way to finance it, since the financial account closed with a deficit of 1.8% of GDP, and foreign portfolio investment shot 269%, mainly due to the placement of public and private debt.
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Similarly, foreign direct investment (FDI) also grew, with a 22% increase driven by the financial, oil and manufacturing sectors. However, the report warns that this indicator has a more stable and long -term role, while portfolio capitals, bonds and titles that buy foreign investors, are much more volatile and in times of global financial turbulence, those resources can leave quickly, leaving the country with a hole difficult to cover.
In other words, the Colombian economy is increasingly financed with debt and portfolio capitals, a strategy that It gives oxygen in the short term, but also increases external vulnerability.
Colombia should look for other ways to finance the current account deficit.
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A manageable deficit, but with risks
For the Bogotá Bank, the current account deficit is still manageable in terms of its magnitude, since the estimate is that this indicator could close the year by 2.6% of GDP, a level that does not turn on immediate alarms; Although the problem, the report insists, is the quality of its financing and the structure that supports it.
“The country is spending more than it produces and finances it with debt. That dependence It implies that, in case of an external shock, such as a stronger oil prices, a global increase in interest rates or a reduction in investor confidence, Colombia would have less maneuvering room to react, ”they said.
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The analysis emphasizes that this situation contrasts with what happens in some countries in the region that have reduced their external deficit from a greater diversification of exports or a surplus in services. In the Colombian case, that diversification progresses, but still does not compensate for the weight of hydrocarbons.
Colombia should look for other ways to finance the current account deficit.
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Looking ahead to 2025, the Bogotá bank expects the deficit Exports face an uncertain panorama for the volatility of energy prices.
Similarly, they sentenced that remittances will continue to be a stabilizing factor, and tourism shows consolidation signals. However, the implicit recommendation of the report is clear and that Colombia must find ways to finance with more stable and sustainable resources, and not depend so much on debt and portfolio.
Daniel Hernández Naranjo
Portfolio journalist
