2006-08-19
Current Account Balance. In June 2006, Lithuania’s balance of payments current account deficit (CAD) made up LTL 347.2 million, showing a decline of LTL 294.2 million (45.9%) compared to May. According to preliminary estimates, in January-June the CAD amounted to LTL 3.4 billion (LTL 2.1 billion in January-June 2005). Compared to May 2006, foreign trade deficit increased by LTL 61.8 million in June, however quite a substantial increase (by about 2.6 times) in the balance of current transfers surplus and a 1/3 contraction in the income balance deficit determined a decline in the current account deficit.
According to the data of the Department of Statistics to the Government of the Republic of Lithuania, in the first half of 2006, compared to the first half of 2005, exports and imports increased by 30.8 per cent and 30.7 per cent, respectively.
The growth of the export and import of goods in the first half this year was mainly driven by an increase in the export of oil products, minerals (50.8%), plastics and articles thereof (75.8%), and vehicles (58.0%). Import expanded as a result of an increase in the import of crude oil and gas (42.6%), vehicles (49.4%), electrical machinery and equipment, television video and sound recorders and reproducers and parts thereof (38.5%).
In the first half of this year, 63 per cent of Lithuania’s total exports of goods accounted for exports to the EU countries, and the import from these countries made up 59.3 per cent. Export to the CIS countries made up 18.8 per cent and import comprised 32.1 per cent.
In June 2006, compared to May, export and import of services increased by 8.4 per cent and 7.2 per cent, respectively. The surplus of the balance of services increased by LTL 25.1 million to make up LTL 248 million in June. In January-June, the export of services expanded by 12.8 per cent and the import of services by 22.6 per cent, therefore the overall positive surplus of the balance of services declined by LTL 91 million.
Payments to non-residents (on their investment in Lithuania) made up LTL 205.2 million in June 2006 (LTL 264.8 million in May), while the income of domestic economic entities on investment abroad made up LTL 56.6 million (LTL 70.5 million in May). As payments contracted further, the deficit in the balance of investment income narrowed by LTL 45.7 million. Including a higher positive balance of compensation of employees, the total income balance deficit was LTL 111.1 million in June 2006, and LTL 1.1 billion in January-June (LTL 0.9 billion over the respective period in 2005).
The surplus of the balance of current transfers stood at LTL 432.7 million in June 2006 (LTL 167.3 million in May). In June, transfers from EU support funds made up LTL 329.3 million (up by LTL 209.3 million compared to May). In addition, the transfers by natural persons were higher by LTL 83.3 million during the period under comparison. It was the factor that determined the overall increase of the surplus of current transfers in June. The surplus of the balance of current transfers was LTL 1 billion in January-June 2006 (LTL 0.9 billion in January-June 2005).
Capital and Financial Account Balance. In June 2006, excluding official reserve assets, investment abroad by domestic economic entities contracted by LTL 360.1 million, and foreign investment in Lithuania by LTL 328.8 million. The net flow of total investment in June (given flows of investment abroad and from abroad) reflected capital inflows - a total of LTL 31.4 million. During six months of 2006, total net capital inflows made up LTL 3.6 billion, of which 79 per cent accounted for net inflows of other investment (which was mainly driven by inflows in monetary financial institutions). Capital transfers from EU support funds made up LTL 41.8 million in June and LTL 343.3 million in January-June (compared to LTL 409.8 million during the respective period in 2005).
In June 2006, the foreign direct investment flow in Lithuania made up LTL 303.6 million. Compared to May, the foreign direct investment flow in Lithuania expanded by LTL 126.6 million in June. In January-June, the flow stood at LTL 1.2 billion (1.6 billion in January-June 2005). Given direct investment abroad by domestic economic entities, the net foreign direct investment flow in Lithuania made up LTL 249.3 million in June 2006 and LTL 897.9 million in January-June 2006.
The net portfolio investment flow was negative in June 2006 (LTL 226.4 million).
The net flow of other investment and financial derivatives was positive in the period under review (LTL 8.5 million).
In June 2006, the country’s official reserve assets contracted. The flow of this contraction in the balance of payments made up LTL 16.5 million. In June, the official reserve assets reduced as a result of a drop in Bank of Lithuania external liabilities and central government deposits with the Bank of Lithuania by LTL 192.9 million and LTL 16.4 million, respectively, and a decline in other factors by LTL 16.4 million.
The official reserve assets were pushed up by an increase in currency in circulation and in deposits of other monetary financial institutions with the Bank of Lithuania of LTL 219.2 million and LTL 0.3 million, respectively.