2008-06-19
Current account balance. In April 2008, the deficit on the current account of the country's balance of payments was LTL 1.2 billion, showing a decrease of 13.2 percent compared to March. In April 2008, the deficit on the current account of the country’s balance of payments was LTL 1.2 billion, showing a decrease of 13.2 percent compared to March. The CAD decreased because of foreign trade deficit which went down by LTL 424.9 million, and income balance deficit which narrowed by LTL 92.1 million. CAD was pushed up by a slump in positive surpluses on the balance of services and balance of current transfers.
In January-April 2008, CAD amounted to LTL 4.76 billion, 16.4 percent above the figure for corresponding period in 2007.
In April 2008, according to the data of the Department of Statistics to the Government of the Republic of Lithuania, export of goods increased by 9.7 percent, while import of goods remained actually unchanged month on month. Compared to the period twelve months ago, export and import of goods increased by 47.7 percent and 29.7 percent respectively. In January-April 2008, export and import of goods increased by 35.2 percent and 30.1 percent compared to the corresponding period in 2007. In January-April 2008, export of Lithuanian goods to the EU Member States accounted for 61.6 percent of total Lithuanian export of goods, while import from these countries made up 58.8 percent of total import of goods. Fast increase of foreign trade volumes with CIS countries led to an increase of the CIS share in total foreign trade. It accounted for 23.5 percent of the national export of goods, and 33.1 per cent of import of goods.
In January-April 2008, the main Lithuania’s export partners were Russia (15.3 %), Latvia (11.2 %), Germany (7.7 %), and Denmark (6.1 %), while the main import partners were Russia (29.2 %), Germany (12.2 %), Poland (9.8 %), and Latvia (5.3 %).
The export growth during this period was mainly driven by an increase in the exports of mineral products (2.4 times), fertilisers (79.1 %), and grain (12.8 times). Import growth was driven by an increase in the imports of mineral products (2.1 times), ground vehicles (12.3 %), and electrical machinery and equipment (12.2 %).
In April 2008, export of services increased by 5.5 percent month on month, while import of services went up by 21.8 percent; consequently total surplus of the positive (+) balance of services declined by LTL 80.1 million or 35.9 percent. In April, total positive surplus on the balance of services went down mainly due to negative (-) balance of trips. In January-April 2008, compared to the same period in 2007, export of services increased by 10.9 percent and import of services grew by 4.9 percent, while total surplus of positive balance of services went up by 37.8 percent.
In April 2007, payments to non-residents (for their investment in Lithuania) made up LTL 447.6 million, and the income of domestic economic entities on investment abroad made up LTL 139.2 million. In April, the deficit of the balance of investment income stood at LTL 308.3 million, a decrease of 19.2 percent month on month. With the positive balance of compensation of employees, total income balance deficit was LTL 276.4 million (LTL 368.5 million in March 2008). In January to April 2008, total income balance deficit made up LTL 1.1 billion, an increase of 12.6 percent compared to the corresponding period in 2007.
In April 2008, the surplus in the balance of current transfers amounted to LTL 120.3 million (LTL 373.3 million in March 2008). The major reason behind that decrease was a decline of transfers from EU. In January-April 2008, the surplus on the balance of current transfers was LTL 864.8 million (LTL 933.2 million in January-April 2007).
In the first four months of 2008, transfers from EU support funds grew by 19.3 percent year on year, and remittances by individuals went up by 11.5 percent. However, the Lithuania’s contribution to the EU budget increased by 54.7 percent and outflow of remittances of individuals went up by 28.4 percent. The growth of the Lithuania’s contribution to the EU budget and outflow of private remittances led to a total decrease of the surplus of current transfer balance.
Capital and financial account balance. The total foreign investment by domestic economic entities, excluding official reserve assets, decreased by LTL 39.2 million and total foreign investment inflow made up LTL 1.4 billion; consequently net flow of all investments (both outward and inward investment) was positive and reached LTL 1.4 billion. In January-April 2008, total foreign investment outflow made up LTL 924.8 million, while foreign investment inflow amounted to LTL 2.6 billion. Year on year total outflow of foreign investment by domestic economy agents grew by LTL 323.9 million or 53.9 percent, while total foreign investment inflow declined by LTL 1.8 billion or 40.5 percent.
In April, non-repayable capital transfers made up LTL 227.3 million, while in January-April capital transfers amounted to LTL 1.1 billion (LTL 448 million in January-April 2007) .
In April 2008, foreign direct investment inflow equalled to LTL 370.1 million. Taking into account foreign direct investment by domestic economic entities, the net inflow of foreign direct investment in Lithuania made up LTL 225.1 million, a decrease of LTL 191.8 million compared to March. In January-April 2008, foreign direct investment flow in Lithuania amounted to LTL 1.1 billion, a decrease of 28.9 percent year on year. In January-April of the current year, 17.6 percent of foreign direct investment went for financing CAD, while foreign direct investment along with non-repayable capital transfers accounted for 41.1 percent of the CAD financing (respectively 29.9 and 40.8 percent in the corresponding period of 2007).
In April 2008, net portfolio investment flow was negative (-) at LTL 182 million, while in January-April 2008, net outflows amounted to LTL 668.3 million. This was determined by growing portfolio investment outflow and decreasing liabilities to non-residents.
In April 2007, net flow of other investments and financial derivatives was positive (+) showing the foreign capital inflow, amounting to LTL 1.4 billion. In January-April 2008, net inflow of these investments was positive (+) too, amounting to LTL 1.5 billion. However, net inflow of other investments decreased by LTL 2.6 billion year on year. A decrease of the inflow of these investments in domestic MFIs had the largest effect on the decrease of this type of investments.
At the end of April 2008, official reserve assets made up LTL 16.3 billion (EUR 4.7 billion or USD 7.3 billion). In April, they increased by LTL 591.1 million or by 3.8 percent
The growth of official reserve assets was driven by the increase of currency in circulation and deposits of other MFIs with the Bank of Lithuania respectively by LTL 368 million and LTL 262.3 million. Official reserve assets were also pushed up by increase of external liabilities of the Bank of Lithuania and central government deposits with the Bank of Lithuania, respectively by LTL 85.3 million and LTL 61 million.
A change in other factors pushed official reserve assets down by LTL 185,4 million.