2007-08-14
Current account balance. In June 2007 the balance of payments current account deficit (CAD) made up LTL 696.2 million, showing a decrease of 47.4 per cent compared to May and an increase of 23.7 per cent compared to June 2006. In June 2007, the CAD decreased due to lower trade and income balance deficits and significantly higher positive balance of current transfers.
In January - June 2007, the CAD amounted to LTL 5.7 billion and exceeded the CAD of the corresponding period last year by 57.8 per cent. This increase was determined by the growth of the foreign trade deficit of LTL 2.02 billion (the CAD increased by LTL 2.09 billion).
According to the data of the Department of Statistics, export of goods increased by 1 per cent, while import of goods declined by 5.7 per cent in June 2007, compared to May 2007. In June 2007, compared to May 2007, the foreign trade deficit went down by 20.4 percent (year-on-year it grew by 13.3 per cent).
In the first half of 2007, the year-on-year export and import of goods rose by 7.0 per cent and 15.4 per cent, respectively, while foreign trade deficit widened by 42.5 per cent to LTL 8.6 billion. The largest share of the export of goods during this period consisted of mineral products (14.5 %), machinery and mechanical and electrical appliances (12.1 %), and vehicles and associated transport equipment (11.4 %). The said groups of goods also accounted for the largest share of the import: 17.7, 16.7 and 16.5 per cent respectively.
In the first half of 2007, the export of goods of Lithuania to the EU25 countries went up by 10.7 per cent and the import from them by 30.1 per cent, while the export to the CIS countries grew by 32.8 per cent and the import from them declined by 17.2 per cent.
In January - June 2007, the main Lithuania’s export partners were Russia (14.2 %), Latvia (12.8 %), Germany (10.9 %), and Poland (6.6 %), while the main import partners were Russia (18.9 %), Germany (14.8 %) and Poland (10.5 %).
In June 2007, the export of services went up by 3.9 per cent and the import of services by 15 per cent month-on-month, therefore, the total positive surplus of the balance of services went down by LTL 61.5 million to LTL 215.7 million. In January - June 2007, the export of services grew by 4.9 per cent and the import of services by 14.6 per cent year-on-year. The positive surplus of the balance of services in January - June 2007 declined by LTL 239.5 million or 16.9 per cent.
Payments to non-residents (on their investment in Lithuania) made up LTL 337.3 million in June 2007, while the income of domestic economic entities on investment abroad made up LTL 96.8 million. The deficit of the investment income balance made up LTL 240.5 million in June and declined by LTL 190.2 million, compared to May. Since the positive labour income balance declined in June, the total deficit of the income balance made up LTL 190.6 million in June 2007. In January - June 2007, the income balance deficit increased by 10.8 per cent year-on-year (to LTL 1.5 billion).
In June 2007, the surplus of the balance of current transfers stood at LTL 339.2 million (LTL 100.2 million in May 2007). The increase of the surplus was determined by the growth of transfers from the EU support funds of LTL 205.8 million.
In January-June 2007 the positive surplus of the balance of current transfers increased by LTL 317 million or 30.3 per cent year-on-year (to LTL 1.36 billion).
Capital and Financial Account Balance. In June 2007, the foreign investment of domestic economic entities, excluding official reserve assets, increased marginally (their flow made up LTL 27.8 million). The flow of foreign investment in Lithuania made up LTL 1.73 billion, therefore, the total net investment flow (both outward and inward investment) remained broadly unchanged at LTL 1.71 billion.
In January-June 2007, the investment flow abroad amounted to LTL 1.68 billion, while the investment flow in Lithuania made up LTL 8.12 billion. Year-on-year, the investment flow abroad declined by 33.1 per cent, while the investment flow in Lithuania went up by 33.4 per cent. Capital transfers made up LTL 115.7 million In June, while from January to June 2007 they amounted to LTL 568.9 million (LTL 381.9 million from January to June 2006)
Foreign direct investment flow in Lithuania amounted to LTL 287.7 million in June 2007. Taking into account foreign direct investment by domestic economic entities, the net foreign direct investment flow made up LTL 229.3 million in June. During the period from January to June, this flow amounted to LTL 2.77 billion (LTL 1.43 billion from January to June 2006), while the net flow made up LTL 2.22 billion.
The net portfolio investment flow was negative both in June and in the period from January to June (LTL 214.5 million and LTL 1.53 billion, respectively). It was determined by the increased investment of collective investment funds and pension funds abroad and buy-ups of shares from small investors in Lithuania.
The net flow of other investment and financial derivatives was positive both in June and in the period from January to June (LTL 1.69 billion and LTL 5.75 billion, respectively). The increase of liabilities of domestic monetary financial institutions had the largest impact on the total positive flow of this investment.
Official reserve assets went up in June 2007, and their flow in the balance of payments amounted to LTL 1.03 billion. This growth was affected by the increase of external liabilities of the Bank of Lithuania and currency in circulation of LTL 748.6 million and LTL 241.8 million, respectively, in addition to the increase of deposits of other monetary financial institutions and central government with the Bank of Lithuania of LTL 109.8 million and LTL 109.2 million, respectively.
A factor reducing reserve assets was the contraction of other factors of LTL 188.3 million.