Today, the Bank of Lithuania released the balance of payments data for Q4 2023, which shows that:
the growth in the surplus on the current account balance (CAB) was about fourfold, compared to the third quarter of 2023, and amounted to €788.7 million, or 4.2% of gross domestic product (GDP). This development was mainly underpinned by the primary income balance (€142.5 million) which turned from deficit to surplus, as well as the balance of services (€1.8 billion) and the secondary income balance (€125.0 million) which remained in surplus, despite recording a decline. The rise in the foreign trade deficit (8.4%) was affected by imports of goods, which increased more than exports (by 1.9% and 1.1% respectively). The former amounted to €1.2 billion;
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compared to the previous quarter, as imports of services (17.7%) grew faster than exports (4.2%), the surplus on the balance of services decreased by 15.7% and stood at €1.8 billion;
the surplus primary income balance was mainly affected by a rise in the surplus balance of other primary income (€519.2 million), and a fall by a factor of 2.5 in the deficit on the investment income balance (€359.4 million);
the secondary income balance decreased by 25.8% but remained in surplus at €125.0 million. It was influenced by an increase in foreign support received by general government and other sectors.
For comparison: a year ago, the CAB was in deficit and stood at €802.1 million, or 4.6% of GDP at current prices (see Chart 1);
the surplus on the capital account balance increased by a factor of 2.1 quarter on quarter and amounted to €639.0 million. This development was mainly a result of increased transfers from EU structural support funds dedicated to financing investment projects. In the fourth quarter of 2022, the surplus on the capital account balance equalled €492.4 million;
over the reporting period, the net flow of financial account investment was positive and stood at €1.3 billion, or 7.2% of GDP. It was determined by the positive net flows of other investment (€2.4 billion) and a rise of €49.4 million in official reserve assets. These positive flows were not offset by negative net flows of direct and portfolio investment (€675.4 million and €400.1 million respectively).
For comparison: in the fourth quarter of 2022, the net flow of financial account investment was positive and amounted to €252.2 million, or 1.4% of GDP at current prices (see Chart 2);
the net international investment position was positive and amounted to €913.8 million, or 1.3% of GDP, at the end of the fourth quarter. It was negative a year ago, amounting to €4.7 billion, or 7.0% of GDP at current prices;
at the end of the reporting period, Lithuania’s gross external debt stood at €49.2 billion, or 68.3% of GDP, while the net external debt amounted to -€9.1 billion, or 12.7% of GDP, i.e. Lithuania’s assets abroad exceeded foreign liabilities.
For comparison: a year ago, Lithuania’s gross external debt stood at €45.6 billion, or 67.6% of GDP, while the net external debt amounted to -€3.8 billion, or 5.7% 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
It should be noted that, when calculating the balance of payments data for Q4 2023, the balance of payments data as well as international investment position data for Q1-Q3 and January-December 2023 were revised.
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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