Balance of payments of the Republic of Lithuania for Q3 2023

the current account balance (CAB) turned from deficit (€53.2 million) to surplus and amounted to €254.3 million, or 1.3% of gross domestic product (GDP). This development was mainly determined by an increase of €247.5 million in the surplus balance of services. Compared to the previous quarter, as exports of services grew faster than imports (7.0% and 2.9% respectively), the surplus on the balance of services rose by 13.6% and stood at €2.1 billion;
the surplus secondary income balance went up by 2.8% and amounted to €143.1 million. It was influenced by an increase in foreign support received by general government;
the surplus balances of services and secondary income were not offset by reduced deficits on the foreign trade and primary income balances. As a result of a fall in exports and imports of goods (by 2.0% and 1.9% respectively), foreign trade deficit shrank by 1.0% to stand at €1.1 billion;
primary income deficit declined by €44.8 million (4.9%), amounting to €866.8 million. It was mainly influenced by a decrease in the deficit on the investment income balance (€848.2 million) and by other primary income balance, which turned from deficit to surplus (€2.5 million).
For comparison: a year ago, the CAB was in deficit and stood at €1.0 billion, or 5.5% of GDP at current prices (see Chart 1);

the surplus on the capital account contracted by 18.6%, compared to the previous quarter, and amounted to €257.8 million. This development was mainly a result of reduced transfers from European Union structural support funds dedicated to financing investment projects. In the third quarter of 2022, the surplus on the capital account equalled €172.3 million;

over the reporting period, the net flow of financial account investment was positive and stood at €1.5 billion, or 7.8% of GDP. It was determined by the positive flows of other and portfolio investment (€1.3 billion and €758.6 million) and a rise of €129.1 million in official reserve assets. These positive flows were not offset by a negative net flow of direct investment (€629.4 million).
By contrast, in the third quarter of 2022, the net flow of financial account investment was negative and amounted to €473.2 million, or 2.5% of GDP at current prices (see Chart 2);

the net international investment position was negative and amounted to €623.6 million, or 0.9% of GDP, at the end of the third quarter. It was also negative a year ago, amounting to €4.7 billion, or 7.3% of GDP at current prices;

at the end of the reporting period, Lithuania’s gross external debt stood at €47.9 billion, or 67.6% of GDP, while the net external debt amounted to -€6.9 billion, or 9.8% of GDP, meaning that Lithuania’s assets abroad exceeded foreign liabilities.
For comparison: a year ago, Lithuania’s gross external debt stood at €44.8 billion, or 69.0% of GDP, while the net external debt amounted to -€2.7 billion, or 4.2% 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 country’s balance of payments and international investment position as well as external debt is available on the Bank of Lithuania website (under External statistics).

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Statistics, External statistics