2006-03-17
Current Account Balance. In January 2006, the Balance of Payments current account deficit (CAD) amounted to LTL 376.1 million and was almost equal to the CAD in December 2005 (LTL 375.1 million), however, it was almost three times higher than in January last year (LTL 126.2 million). Compared to December 2005, the foreign trade deficit decreased in January 2006, however, a higher income balance deficit and lower surpluses in services and current transfer balances determined the size of the current account deficit.
According to the data of the Department of Statistics, in January 2006, compared to December 2005, export of goods decreased by 11.9 per cent, while import of goods went down by 16.7 per cent. The foreign trade deficit was 31.5 per cent lower in January 2006 than in December 2005. On the other hand, export of goods and import of goods increased by 19.9 per cent and 31.2 per cent, respectively, while the trade deficit more than doubled in January 2006, compared to January 2005. Export to the EU states comprised slightly more than two thirds of the export of goods of Lithuania, while import from the said countries made up 55.7 per cent. Export to the CIS countries made up 15.2 per cent, and import comprised 32.9 per cent.
Month-on-month, export of services went down by 21.9 per cent, while import of services by 15.8 per cent, and the total surplus of the positive balance of services went down by LTL 70.8 million to LTL 106 million in January 2006.
Payments to non-residents (on their investment in Lithuania) made up LTL 191.1 million in January 2006 (LTL 143.5 million in December 2005), while the income of domestic economic entities on investment abroad made up LTL 62.6 million (LTL 64.3 million in December 2005). Therefore, the investment income balance deficit increased by LTL 49.3 million. The total deficit of the income balance, including the small compensation balance deficit, increased by LTL 111.2 million to LTL 133.6 million in January 2006, compared to December 2005.
The surplus of the balance of current transfers stood at LTL 152.4 million in January 2006 (LTL 250.8 million in December 2005).In January 2006, transfers from EU support funds made up LTL 134.8 million (they increased by LTL 55.3 million, compared to December 2005), however, significantly decreased transfers to various public organisations and transfers of individual persons determined the overall decrease of the surplus of current transfers.
Capital and Financial Account Balance. In January 2006, the investment flow abroad by domestic economic entities, excluding official international reserves, was negative (at LTL 211.1 million), while the foreign investment flow in Lithuania made up LTL 523.2 million. The total net investment flow (both outward and inward investment) was LTL 734.3 million in January. In January 2006, non-repayable capital transfers from EU support funds made up LTL 76 million (LTL 320.3 million in December 2005).
Foreign direct investment flow in Lithuania amounted to LTL 109.4 million in January 2006. Compared to December 2005, direct investment flow in Lithuania was lower by LTL 179 million. Taking into account foreign direct investment by domestic economic entities, the net foreign direct investment flow in Lithuania made up LTL 105.9 million in January 2006, LTL 681.7 million in the last twelve months.
In January 2006, net portfolio investment flow showed a LTL 154.1 million larger increase of claims to non-residents, compared to liabilities. It was determined by the increased investment of collective investment funds and pension funds in non-resident debt securities and decreased investment of other domestic economic sectors in non-resident equities.
The net flow of other investment and financial derivatives was positive in the period under review (LTL 782.6 million). The highest impact on the total positive flow of this investment came from a decline in domestic commercial banks’ time deposits with foreign banks and from a rise in non-resident deposits and correspondent account balances with domestic banks.
In January 2006, reserve asset flow in the balance of payments was positive and amounted to LTL 509.9 million. In January, international reserves were increased by higher central government deposits with the Bank of Lithuania and Bank of Lithuania repurchase transactions with non-residents of LTL 561.5 million and LTL 244.9 million, respectively, as well as the net growth of Bank of Lithuania other foreign liabilities and other liabilities of LTL 17.4 million and LTL 1.2 million, respectively.
International reserves were affected in the opposite direction by the decline of the currency outside the Bank of Lithuania and credit institution balances with the Bank of Lithuania of LTL 254.8 million and LTL 52.8 million, respectively.