2007-06-18
Current account deficit. In April 2007, the balance of payments current account deficit (CAD) amounted to LTL 1.07 billion and was twice higher than in March 2007 and more than 1.5 times higher than in April last year. The increase in CAD in April 2007 was driven by a significantly higher foreign trade deficit, because an increase in the positive surplus of the balance of services and a decline in the income balance deficit were offset by a decrease of the positive surplus of the balance of current transfers.
In January-April 2007, the CAD amounted to LTL 3.24 billion and exceeded the CAD of the corresponding period last year by 36 per cent. The increase was mostly determined by the increase in the foreign trade deficit, which was only partially offset by twice higher positive surplus of the balance of current transfers and 25 per cent lower income balance deficit.
According to the data of the Department of Statistics, in April 2007, compared to March, export of goods declined by 6.4 per cent, while import of goods grew by 5.1 per cent. In April 2007, compared to March 2007, the foreign trade deficit went up by 41.9 percent, while year-on-year it grew by 83.7 per cent.
Year-on-year, in January-April 2007 the export and import of goods went up by 6,8 per cent and 16.4 per cent, respectively, while the foreign trade deficit grew by 48.6 per cent (to LTL 5.4 billion). Export to the EU states comprised 66.6 per cent of the export of goods of Lithuania, while import from the said countries made up 67.2 per cent. The share of the CIS countries in the overall composition of both the export and the import made up 22.6 per cent.
In January-April 2007, the main Lithuania’s export partners were Russia (14.1 %), Latvia (12.6%), Germany (11.7%), and Poland (6.8%), while the main import partners were Russia (18.7 %), Germany (14.8 %) and Poland (10.6 %).
In January-April 2007, the largest share of the export of goods consisted of mineral products (13.4%), machinery and mechanical and electrical appliances (12.2%) vehicles and associated transport equipment (11%). The said groups of goods also accounted for the largest share of the import: 17.5%, 16.6% and 16.4% respectively.
In April 2007, export of services declined by 0.3 per cent, while import of services by 10.1 per cent month-on-month, therefore, the total positive surplus of the balance of services went up by LTL 61.5 million to LTL 232.4 million. In January-April 2007, compared to the same period in 2006, the export of services increased by 2.6 per cent, while the import of services grew by 12.6 per cent. The positive surplus of the balance of services in January-April 2007 declined by LTL 176.4 million or 19.6 per cent.
Payments to non-residents (on their investment in Lithuania) made up LTL 280.8 million in April 2007, while the income of domestic economic entities on investment abroad made up LTL 93.7 million. The deficit of the investment income balance made up LTL 187.1 million in April and declined by LTL 52.6 million, compared to March. Since the balance of compensation of employees was positive in April, the total deficit of the balance of compensation of employees in April 2007 made up LTL 155.6 million and declined by LTL 115.3 million, compared to March. In January-April 2007 the income balance deficit went down by 23.5 per cent (to LTL 672.5 million) year-on-year.
The surplus of the balance of current transfers stood at LTL 167.5 million in April 2007 (LTL 397.7 million in March). Such a decline was determined by the drop of LTL 322.6 million in the transfers from the EU support funds and an increase of LTL 11.6 million in contributions to the EU budget. In April, transfers of individuals made up LTL 159 million (up by LTL 107.5 million compared to March).
In January-April 2007 the year-on-year growth of the transfers from the EU support funds made up LTL 243 million (45%), while that of the transfers by individuals stood at LTL 232.3 million (almost 2.5 times). The positive surplus of the balance of current transfers in January-April 2007 went up by LTL 481.8 million or 2.1 times (to LTL 922.4 million).
Capital and financial account balance. In April 2007, the investment flow abroad by domestic economic entities, excluding official reserve assets, was negative (i.e. investment abroad declined) and stood at LTL 228.9 million. Meanwhile, the foreign investment flow in Lithuania was positive (investment increased), making up LTL 1.45 billion. The total net investment flow (both outward and inward investment) was LTL 1.68 billion in April.
In January-April 2007, the outward investment flow equalled to LTL 421 million, while the inward investment flow amounted to LTL 3.82 billion. Year-on-year, the outward investment flow decreased by 75.5 per cent and the inward investment flow went down by 10.7 per cent. Capital transfers from EU support funds made up LTL 222.3 million in April and LTL 436.4 million in January-April 2007 (LTL 261.7 million in January-April 2006).
Foreign direct investment flow in Lithuania amounted to LTL 348.4 million in April 2007. Taking into account foreign direct investment by domestic economic entities, the net foreign direct investment flow in Lithuania made up LTL 303.1 million in Apri. Foreign direct investment flow in Lithuania made up LTL 1.87 billion in January-April 2007 (LTL 789.6 million in January-April 2006), while the net flow stood at LTL 1.62 billion. A significant share of the direct investment flow in Lithuania consisted of the buying up of shares of some companies from small investors; however, it led to the contraction of investment portfolio liabilities to non-residents.
Net portfolio investment flow was negative in April 2007 (LTL -67.3 million), while in January-April it made up LTL 1.45 billion. It was determined by the increased investment of collective investment funds and pension funds abroad and already mentioned buy-ups of shares from small investors in Lithuania.
Net flow of other investment and financial derivatives was positive in April (LTL 1.44 billion) and in January-April it amounted to LTL 3.22 billion. The increase of short-term liabilities of domestic monetary financial institutions had the largest impact on the total positive flow of this investment.
The reserve asset flow in the balance of payments amounted to LTL 899.7 million in April 2007, i.e. it reflected an increase in these reserves. This increase was determined by the growth of deposits of other monetary financial institutions at the Bank of Lithuania and currency in circulation of LTL 656.1 million and LTL 303.8 million, respectively, and the increase of external liabilities of the Bank of Lithuania of LTL 21.9 million.
Official reserve assets were pushed down by a decline of other factors and central government deposits with the Bank of Lithuania of LTL 50,1 million and LTL 47.4 million, respectively.