COLOMBIA – Another large trade deficit in 2Q21

The swift recovery of internal demand and higher income deficit would lead to a large CAD this year

Vittorio Peretti & Carolina Monzón


A USD 1.6 billion trade deficit was recorded in June, larger than the USD 0.4 billion deficit last year as strong import dynamism persists amid the reopening of the economy. The trade deficit was larger than the Bloomberg market consensus of USD 1.4 billion (Itaú: 1.5 billion). As a result, the rolling 12-month trade deficit sits at USD 12.6 billion, the widest deficit since September 2016 (USD 10.1 billion in 2020). At the margin, the quarterly trade deficit widened to USD 17.7 billion (annualized) from USD 11.6 billion in 1Q21.

The import recovery is widespread. Total imports (FOB) grew 69.2% year-over-year in June (+51.5% previously), lifted by intermediate goods imports (fuels as well as industrial inputs), a doubling of durable consumer goods imports (mainly autos) and capital goods linked to construction and transportation. In 2Q21, imports grew 57.1% year-over-year (+5.2% in 1Q), offsetting the 34.3% decline during 2Q20. At the margin, we estimate that imports expanded 62.1% qoq/saar, broadly stable from the 51.9% expansion recorded in 1Q21.

While oil exports more than doubled in 2Q21, volumes fell by more than a fifth. Exports increased 33.1% yoy in June, moderating from the 39.4% growth in May. Oil exports rose 79.9% yoy, well below the 121.6% increase in the previous month. Exports excluding traditional goods (oil, coal, coffee, and ferronickel), accounting for around a half of shipments abroad, increased 28.8% YoY (24.7% previously), reflecting some improvement in transportation after the difficulties in May amid the nationwide protest. In 2Q21, exports grew 42.9% YoY (+1.5% in 1Q), similar to the annual contraction recorded a year ago. At the margin, exports grew 1.4% qoq/saar, slowing sharply from the 92.4% rise in 1Q21.  

We expect a current account deficit of 4.3% of GDP for this year, surpassing the 3.4% registered last year. The swift recovery of internal demand and higher income deficit would offset the positive effect on exports of high terms of trade.

Vittorio Peretti 
Carolina Monzón