* C/a deficit is $4.46 bln in first half of year
* Amounts to 2.7 pct of gross domestic product (GDP)
BOGOTA Oct 1 Colombia's current account
deficit widened in the first half of the year to $4.46 billion,
or 2.7 percent of gross domestic product, fueled by imports and
capital outflows abroad by firms, central bank data showed.
Once seen as a failing state, Colombia has become a magnet
for foreign investment, especially in its natural resources
sectors, and has found strong demand for the
now-investment-grade debt in Latin America's No. 5 economy.
In the first half of 2010, the country posted a current
account deficit in its balance of payments of $2.67 billion, or
1.9 percent of GDP.
"This widening originated principally by a rise in current
outflows related to imports of goods and services and greater
profits garnered by foreign-funded companies," the bank said in
a report published late on Friday.
"The rise of outflows was partially offset by greater
values of exported goods and services."
The current account balance is the widest measure of a
country's foreign transactions, encompassing trade, interest
payments and services. As such, it is a gauge of a country's
reliance on foreign capital.
Contributing to the widening current account deficit were
profit remittances by foreign companies operating in Colombia,
which rose 33.6 percent to $6.2 billion versus a year earlier,
the central bank said.
That stemmed in particular from foreign companies producing
coal and oil in the country, the bank said. Colombia is the
world's No. 4 coal exporter, Latin America's No. 4 oil producer
and a top ferronickel producer.
Countering that were inflows including remittances by
Colombians working abroad, who sent home $2 billion in the
first half of the year, equal to 1.2 percent of GDP and a 7.6
percent increase in dollar terms from a year earlier.
Helping offset the current account deficit was net foreign
direct investment (FDI), which is part of the balance of
payment's capital account.
Net FDI rose 74 percent to $6.29 billion in the first half
of the year versus 2010's first half, the bank said.
Net FDI by foreign companies into Colombia increased 91
percent to $7 billion during the first half of the year versus
$3.66 billion a year earlier, it said.
The bulk of that flowed into the oil and mining sectors, it
Colombia has seen a boom in foreign investment over the
last few years, mainly in the mining and oil sectors, as
security improves due to a U.S.-backed crackdown.
Colombians net foreign direct investment abroad soared 178
percent to $1.7 billion in the first half of the year, the bank
Foreign portfolio investment shot up eightfold in the first
half of 2011 to $3.29 billion versus $483 million in the same
period last year, the authority said.
(Reporting by Jack Kimball)