WASHINGTON (Reuters) - The U.S. current account deficit narrowed in the fourth quarter to the lowest level in nearly three years amid an increase in secondary income, government data showed on Thursday.

The Commerce Department's Bureau of Economic Analysis said that the current account deficit, which measures the flow of goods, services and investments into and out of the country, contracted $1.6 billion, or 0.8%, to $194.8 billion last quarter. That was the lowest level since the first quarter of 2021. Economists polled by Reuters had forecast the current account deficit at $209.0 billion.

The current account gap represented 2.8% of gross domestic product, little changed from the third quarter. The deficit peaked at 6.3% of GDP in the fourth quarter of 2005.

The United States is now a net exporter of crude oil and fuel. Though the deficit remains large, it has no impact on the dollar given its status as the reserve currency.

The current account deficit shrank $152.8 billion, or 15.7%, to $818.8 billion in 2023. It was 3.0% of GDP, down from 3.8% in 2022. The drop mostly reflected a smaller goods deficit.

In the fourth quarter, secondary income increased $5.0 billion to $49.6 billion, boosted by general government transfers, mostly fines and penalties. That offset a widening in the goods trade deficit. Exports of goods decreased $1.4 billion to $514.4 billion. Imports of goods increased $4.4 billion to $779.4 billion.