2004-08-11
The foreign trade deficit narrowing for the second month in turn determined the narrowing of the balance of payments current account deficit. In June 2004, the balance of payments current account deficit (CAD) made up LTL 198.7 million. It contracted by LTL 198.5 million compared to May 2004, however, compared to June 2003, it widened by LTL 29.6 million.
Due to the changes in foreign trade statistics methodology, data collection system and sources as from May 2004, June data are partly incomparable with the corresponding period last year. According to the preliminary data of the Department of Statistics, in June 2004, compared to May, export of goods increased by 7.2 per cent, while import of goods contracted by 5 per cent.
Compared to May 2004, export of services increased in June by 3.2 per cent, while import of services grew by 11.0 per cent. The positive balance of services decreased by LTL 21.6 million and amounted to LTL 140.7 million. Year-on-year, export of services increased by 7.3 per cent, while import of services grew by 23.2 per cent. The positive balance of services contracted over the period under review by LTL 36 million.
In June 2004, compared to May, payments to non-residents on their investment in Lithuania went up by LTL 81.6 million and amounted to LTL 208.3 million. This increase was determined by the growth of dividend payments to non-residents on foreign direct investment in the private sector. The total income balance was negative in June 2004 at LTL 135.6 million. Compared to May, it went up by LTL 89.6 million, expanding, year-on-year, by LTL 158.5 million.
The balance of current transfers was positive in June 2004 at LTL 8.2 million only. Compared to May 2004, this balance declined by LTL 18.1 million.
The positive capital and financial account balance made up LTL 422.3 million in June 2004. Excluding reserve assets, investment flows abroad by domestic economic entities (LTL 145.4 million) reflected net payments (outflows), and non-resident investment flows in Lithuania (LTL 111.4 million) - total net inflows.
Foreign direct investment flows in Lithuania were positive in June 2004 (LTL 133.5 million), which was determined by non-resident investment in equity capital (acquisitions of qualifying holdings) in the sector of financial intermediation, reinvestment and loans received from investors. Taking into account foreign direct investment by domestic economic entities, net foreign investment inflows made up LTL 133.4 million in June.
Net portfolio investment flows were negative in June (LTL -200.5 million), which was determined by investment of domestic commercial banks in non-resident debt securities.
Other investment flows were positive in June (LTL 21.7 million). These investment inflows were determined by the increase in non-resident deposits and balances on correspondent accounts.
Reserve assets went down in June 2004. Reserve asset flows in the balance of payments were negative (LTL 456.5 million). The main reasons behind the decrease were net purchase of foreign exchange by commercial banks from the Bank of Lithuania of LTL 260.3 million and an LTL 187.3 million decline in Bank of Lithuania repurchase transactions with non-residents. Reserves were pushed up by an LTL 38.8 million increase in commercial bank required reserves in foreign exchange and net inflows of the Bank of Lithuania from investment in foreign currencies.