2006-02-13
Current Account Balance. In December 2005 the current account deficit (CAD) contracted by LTL 148.3 million month-on-month to LTL 375.1 million. The contraction of the current account deficit in December was determined by the increase of the positive surplus of current transfers. Meanwhile, the decline of the foreign trade deficit was set-off by a lower positive surplus of the balance of services. According to the data of the monthly balances, the current account deficit in January-December 2005 made up LTL 5 billion (LTL 4.8 million in January-December 2004).
According to the data of the Department of Statistics under the Government of the Republic of Lithuania, exports of goods decreased by 7.3 per cent and imports of goods went down by 7.4 per cent in December 2005, compared to November, therefore, the foreign trade deficit was lower than in November by 7,6 per cent. Compared to the same period last year, from January to December 2005 export of goods increased by 27.1 per cent, while import grew by 25 per cent. Last year, the trade with the CIS countries expanded the most: both export and import grew. Export to the EU states comprised almost two thirds of the export of goods of Lithuania, while import from the said countries made up 59.1 per cent. Export to the CIS countries made up 17.7 per cent, and import comprised 31.3 per cent.
Month-on-month, export of services grew by 3 per cent, while import of services by 12.2 per cent, and the total surplus of the positive balance of services went down by almost LTL 37 million to LTL 176.8 million in December 2005. According to preliminary estimates, export of services increased by 20.9 per cent in 2005, while import of services grew by 23.6 per cent year-on-year. The surplus of the balance of services increased by LTL 348 million over the period under review.
Payments to non-residents (on their investment in Lithuania) made up LTL 143.5 million in December 2005 (LTL 117.5 in November), while the income of domestic economic entities (on foreign investment) made up LTL 64.3 million (LTL 46.1 million in November). Therefore, the investment income balance deficit increased by LTL 7.8 million. In December, the surplus of labour income balance made up LTL 56.8 million. In December 2005, compared to November 2005, the total income balance deficit went up by LTL 5.1 million and comprised LTL 22.4 million.
The surplus of the balance of current transfers stood at LTL 250.8 million in December 2005 (LTL 93.1 million in November). The increase of the surplus of current transfers was determined by the support transfers to various public organisations of the country (higher by LTL 70 million) and the transfers from the EU support funds (higher by LTL 64.9 million). In January-December 2005 the surplus of the balance of current transfers made up LTL 1.72 billion (LTL 454 million more than over the same period a year ago). This increase was determined by higher transfers from the EU support funds and by increased transfers of individuals.
Capital and Financial Account Balance. In December 2005, the investment flow abroad by domestic economic entities, excluding official international reserves, stood at LTL 70.5 million and the foreign investment flow in Lithuania made up LTL 829.3 billion. The total net investment flow (both outward and inward investment) was LTL 758.8 million in December. In December, non-repayable capital transfers from EU support funds made up LTL 320.3 million (LTL 60.7 million in November).
In December 2005, foreign direct investment flow in Lithuania made up LTL 288.4 million, and in January - December amounted to LTL 1.69 billion. Year on year, direct investment flow in Lithuania was lower by LTL 465.1 million over this period. Taking into account foreign direct investment by domestic economic entities, the net foreign direct investment flow made up LTL 195.5 million in December 2005, LTL 721.2 million from January to December.
In December 2005, net portfolio investment flow showed a LTL 327.4 million larger increase of claims to non-residents, compared to liabilities. This situation was entailed by larger investment of MFIs and other domestic economic entities into debt securities issued by non-residents.
The net flow of other investment and financial derivatives was positive in December 2005 (LTL 890.8 million). The highest impact on the total positive flow of this investment came from a decline in domestic commercial banks’ deposits and correspondent account balances with foreign banks and from a rise in foreign bank time deposits with domestic banks.
In December 2005, reserve asset flow in the balance of payments was positive and amounted to LTL 703.9 million. The growth of international reserves in December resulted from higher balances of credit institutions with the Bank of Lithuania and an increase of the currency outside the Bank of Lithuania by LTL 458.3 million and LTL 420.8 million, respectively, and a net increase of Bank of Lithuania other liabilities of LTL 20 million.
The international reserves were pushed down by a contraction in the Bank of Lithuania foreign liabilities and central government deposits with the Bank of Lithuania by LTL 93.8 million and LTL 84.3 million, respectively.
International reserves went up by LTL 1,995.0 million or 21.9 per cent in 2005 and stood at LTL 11.1 billion at the end of December (EUR 3.22 billion, USD 3.82 billion).