Bank of Lithuania
2004-02-12

In December 2003, the Balance of Payments current account balance was negative amounting to LTL 583 million (the current account deficit in November amounted to LTL 287.3 million). Compared to December 2002, the current account deficit went up by LTL 221.8 million. It was determined by a higher foreign trade deficit.

According to the data of the Department of Statistics, in December 2003, compared to November 2003, export of goods decreased by 11.7 per cent, while import went up by 6.3 per cent. Compared to the same period last year, in December 2003 export of goods increased by 11.8 per cent, while import grew by 14.3 per cent.

Compared to November 2003, export of services increased in December by 8.9 per cent, while import of services went up by 14 per cent. The positive balance of services declined only slightly and amounted to LTL 157.6 million. Compared to December 2002, export of services increased by 8.4 per cent, while import of services grew by 15.6 per cent. The positive balance of services contracted over the period under comparison by LTL 7.6 million.

Payments to non-residents (on their investment in Lithuania) in December 2003 exceeded the income from Lithuania’s investment abroad by LTL 27 million. The positive labour income balance amounted to as little as LTL 6.5 million. For the above reasons, the overall income balance was negative (LTL 20.5 million). Compared to December 2002, the total negative income balance increased by LTL 19.5 million.

The balance of current transfers increased by LTL 156.5 million in December 2003, in comparison with November, and amounted to LTL 188.4 million (LTL 108 million in December 2002). Such a marked increase in transfers was determined by payments from EU financial support funds (PHARE, SAPARD and ISPA), increased transfers to different domestic public organisations, communities and representations of foreign firms.

The capital and financial account balance was positive and made up LTL 331.1 million. Foreign assets of domestic economic entities (financial claims to non-residents), excluding international reserves, went down by LTL 101.7 million in December, while international financial liabilities increased by LTL 822.7 million. The balance of capital transfers amounted to LTL 36.8 million in December.

Foreign assets of domestic commercial banks increased by LTL 59.9 million in December 2003. The largest increase was recorded in commercial bank loans to non-residents. Foreign assets of other sectors decreased by LTL 161.5 million.

Foreign direct investment flows in Lithuania amounted to LTL 195.5 million in December 2003, of which the largest (LTL 165.3 million) were non-resident investments in equity capital.

The non-resident investment portfolio flows amounted to LTL 168 million in December. The growth of investment portfolio was determined by the distribution of long-term debt securities among non-residents by domestic commercial banks. Other investment flows amounted to LTL 466.7 million in December in Lithuania. The increase of this investment was also determined by investment in the banking sector, i.e. loans received from non-residents.

The positive official reserve asset flows in the balance of payments amounted to LTL 630.1 million in December 2003. The main reason behind the increase was the foreign exchange operations of the Bank of Lithuania with central government institutions, which pushed the reserves up by LTL 403 million. Another source of the increase was the net purchases of foreign exchange from commercial banks of LTL 296.9 million. The official reserves were pushed down by an LTL 108.3 million decline of Bank of Lithuania repurchase transactions with non-residents.