2024-12-20
Today, Lietuvos bankas released the balance of payments data for Q3 2024, which shows that:
the surplus on the current account balance (CAB) declined by 20.0%, compared to the second quarter of 2024, and amounted to €498.6 million, or 2.4% of gross domestic product (GDP). This development was mainly determined by an increase of €96.5 million in the deficit on primary income balance. In value terms, imports of goods, which grew faster than exports (€360.8 million and €342.8 million respectively), pushed up the foreign trade deficit by 1.7%, which totalled €1.1 billion. Compared to the previous quarter, as imports of services (5.7%) grew faster than exports (3.0%), the surplus on the balance of services decreased by 1.0% and stood at €2.3 billion;
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the deficit on primary income balance went up by 17.4% to €651.7 million. This was influenced by the balance of other primary income which turned from deficit to surplus as a result of a decrease in the European Union’s (EU) subsidies for agriculture and an increase in the deficit on the investment income balance;
the deficit on secondary income balance contracted by 16.8% to €58.3 million; this was influenced by a drop in foreign support received by general government and calculated contributions to the EU budget.
For comparison: a year ago, the CAB was also in surplus and stood at €368.8 million, or 1.9% of GDP at current prices (see Chart 1);
the surplus on the capital account balance contracted by 12.7%, compared to the previous quarter, and amounted to €205.4 million. This was a result of decreased transfers from EU structural support funds dedicated to financing investment projects. In the third quarter of 2023, the surplus on the capital account balance amounted to €255.4 million;
over the reporting period, the net flow of financial account investment was positive and stood at €331.2 million, or 1.6% of GDP. It was triggered by positive net other investment and portfolio investment flows as well as an increase in official reserve assets (€874.8 million, €174.1 million and €111.9 million respectively). The impact of these positive flows was mitigated by a negative net flow of direct investment (€803.2 million).
For comparison: in the third quarter of 2023, the net flow of financial account investment was positive and stood at €2.0 billion, or 10.0% of GDP at current prices (see Chart 2);
the net international investment position was positive and amounted to €1.0 billion, or 1.3% of GDP, at the end of the third quarter. It was negative a year ago, amounting to €3.1 billion, or 4.3% of GDP at current prices;
at the end of the reporting period, Lithuania’s gross external debt stood at €56.4 billion, or 73.4% of GDP, while the net external debt amounted to -€10.1 billion, or -13.1% of GDP, i.e. Lithuania’s assets abroad exceeded foreign liabilities.
For comparison: a year ago, Lithuania’s gross external debt stood at €47.7 billion, or 66.0% of GDP, while the net external debt amounted to -€7.9 billion, or -10.9% of GDP.
Chart 1. CAB and its composite flows as a percentage of GDP
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Chart 2. Net financial account investment flows as a percentage of GDP
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Detailed data on the balance of payments and international investment position as well as external debt is available on the website of Lietuvos bankas (under External statistics).
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