2025-06-20
Today, Lietuvos bankas released the balance of payments data for the first quarter of 2025, which shows that:
the current account balance (CAB) was in deficit, unlike in the four quarters of last year, and amounted to €99.0 million, or -0.5% of gross domestic product (GDP). This development was mainly determined by increased deficit on primary and secondary income balances which were not offset by the total positive amount of trade and services balances. In value terms, imports of goods, which grew faster than exports (€376.9 million and €326.0 million respectively), pushed up the foreign trade deficit by 3.2%, which totalled €1.6 billion. Compared to the previous quarter, as import of services decreased more than exports (by 11.6% and 7.0% respectively), the surplus on the balance of services went up by 1.4% and stood at €2.2 billion;
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the deficit on primary income balance went up by a factor of 3.3 and amounted to €469.6 million. It was mainly underpinned by the deficit on the investment income balance (€515.4 million) which was driven by dividends paid out to direct investors and a reduced surplus on other primary income balance (€41.2 million) as a result of reduced European Union (EU) agricultural subsidies;
the deficit on secondary income balance rose significantly and amounted to €161.0 million (€8.9 million in the fourth quarter of 2024). This development was determined by lower EU financial support received by the general government and increased contributions to the EU budget as well as transfers of value added tax and gross national income-based own resources.
For comparison: a year ago, the CAB was in surplus and stood at €609.6 million, or 3.5% of GDP at current prices (see Chart 1);
the surplus on the capital account balance decreased by a factor of 2.8 quarter on quarter and amounted to €199.2 million. This was influenced by reduced transfers from EU structural support funds dedicated to financing investment projects. In the fourth quarter of 2024, the surplus on the capital account balance amounted to €550.1 million;
over the reporting period, the net flow of financial account investment was negative and stood at €395.3 million, or -2.1% of GDP. It was determined by a decrease in official reserve assets (€1.3 billion) and negative net flows of direct and portfolio investment (€257.2 million and €112.6 million respectively), which were not offset by the positive net flow of other investment (€1.3 billion).
For comparison: in the first quarter of 2024, the net flow of financial account investment was negative and stood at €20.9 million, or -0.1% of GDP at current prices (see Chart 2);
the net international investment position was negative and amounted to €82.0 million, or -0.1% of GDP, at the end of the first quarter of this year. A year ago, it amounted to -€2.8 billion, or -3.7% of GDP at current prices;
at the end of the reporting period, Lithuania’s gross external debt stood at €66.0 billion, or 82.9% of GDP, while the net external debt amounted to -€9.7 billion, or -12.2% of GDP, i.e. Lithuania’s assets abroad exceeded foreign liabilities.
For comparison: a year ago, Lithuania’s gross external debt stood at €53.1 billion, or 71.0% of GDP, while the net external debt amounted to -€7.1 billion, or -9.5% of GDP.
Chart 1. CAB and its composite flows as a percentage of GDP
Chart 2. Net financial account investment flows as a percentage of GDP
Detailed data on the balance of payments and international investment position as well as external debt is available on Lietuvos bankas’ website (under External statistics).
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