2005-02-11
Current account balance. In December 2004 the current account deficit (CAD) contracted by LTL 251.6 million month-on-month to LTL 249.5 million. This contraction was mostly determined by the narrowing of the foreign trade deficit. Year-on-year the contraction of CAD was almost threefold.
According to the preliminary data of the Department of Statistics, in December 2004 export of goods declined by 0.2 per cent month-on-month and import of goods by 3.1 per cent. Year-on-year, export of goods went up by as much as 42.5 per cent, while import of goods increased by 9.3 per cent.
Month-on-month, export of services grew by 13.5 per cent, while import of services by 22 per cent, and the total surplus of the positive balance of services went down by LTL 10.5 million to LTL 138.5 million in December 2004. Year-on-year, export of services increased by 14.5 per cent, while import of services grew by 9.3 per cent. The surplus of the positive balance of services improved over the period under review by LTL 35.8 million.
Payments to non-residents (on their investment in Lithuania) made up LTL 137.3 million in December 2004 (LTL 187.6 in November), while the income of domestic economic entities (on foreign investment) made up LTL 43.5 million (LTL 45.7 million in November). Over the period under review the deficit of the investment income balance contracted by LTL 48.0 million, while the surplus of the compensation balance went down by LTL 5.8 million. Due to the above changes, the total deficit of the income balance narrowed by LTL 42.2 million against November (to LTL 93.3 million).
The balance of current transfers improved slightly in December 2004 to LTL 103 million against November.
Capital and financial account balance. The total net foreign investment flow by domestic economic entities (LTL 801.6 million), excluding international reserves, in December 2004 reflected total net payments. A large part of the foreign investment flow was determined by an LTL 1.1 billion increase of time deposits of domestic commercial banks in foreign banks. Non-resident investment flow in Lithuania (total net inflows) amounted to LTL 722.4 million over the reporting period, of which LTL 241.8 million were funds received from EU structural funds for investment projects in Lithuania. Funds in the capital account and net foreign direct investment exceeded the current account deficit in December by a factor of 2.4.
Foreign direct investment flow amounted to LTL 360.7 million in December 2004. Compared to November, it increased by LTL 32.6 million, which was determined by increased non-resident investment in equity capital. Taking into account foreign direct investment by domestic economic entities, net foreign direct investment inflows made up LTL 358.2 million in December 2004.
Net portfolio investment flow was positive in December 2004 (LTL 119.3 million), which was determined by the decline of investment of domestic commercial banks in non-resident debt securities and higher non-resident investment in the short-term Government securities.
Net other investment flow was negative in December 2004 (LTL -794.4 million), which resulted from strong commercial bank foreign investment flow mentioned above. Other investment flow amounted to LTL 112.2 million in December in Lithuania.
Reserve assets went down in December 2004. Their negative flow in the balance of payments stood at LTL 457.1 million. The main reason behind the decrease was the decline of central government deposits with the Bank of Lithuania (LTL 613.9 million) and the contraction of Bank of Lithuania repurchase transactions with non-residents (LTL 110 million). International reserves were affected in the opposite direction by the increase of the volume of currency issued by the Bank of Lithuania of LTL 216.6 million.