Bank of Lithuania

In May 2002, the balance of payments current account deficit made up LTL 374.8 million. Compared to April, it contracted by LTL 48 million. Based on the data for the first quarter, April and May, the current account deficit in January-May 2002 made up LTL 1.2 billion (LTL 979.5 million in January-May 2001). The contraction of the current account deficit in May (according to the impact of individual factors) was caused by a lower foreign trade deficit and increased positive balances of services and current transfers.

In May 2002, compared to April 2002, export of goods increased by 6.5 percent, while compared to May 2001 it went up by 5 per cent. Import of goods (at f.o.b. prices) increased by 4.1 per cent and 19.1 per cent, respectively.

Compared to April, export of services increased in May by 14.3 per cent, while import of services grew by 14.6 per cent. Export growth was mostly determined by higher income from travel services which went up by a quarter. Compared to May 2001, export and import of services increased by 10.4 per cent and 7.7 per cent, respectively. The total positive balance of services in May 2002, as compared to April 2002, improved by LTL 19.2 million and by LTL 20.5 million compared to May 2001.

Payments of dividends by domestic economic entities to non-residents for their investment in Lithuania amounted to LTL 32.9 million in May 2002, and interest on loans received in the name of the state made up LTL 32.2 million. Compared to April, such payments went up by LTL 52.7 million. Meanwhile, interest payments on Eurobonds declined by LTL 46.7 million.

The positive capital and financial account balance made up LTL 90.9 million. Foreign assets of domestic economic entities (financial claims to non-residents), excluding international reserves, increased by LTL 107.3 million in May, while international liabilities went up by LTL 1.33 billion.

Such sizeable foreign investment flows were caused by the successful placement of Government Eurobond issue which resulted in LTL 1.25 billion of receipts. This foreign investment is recorded as portfolio investment inflows in the balance of payments.

Foreign direct investment flows in May made up LTL 105.1 million, LTL 544.9 million in January through May, which, according to preliminary data, was lower by LTL 40.8 million than the foreign direct investment during the same period of 2001.

Other foreign investment flows (increase of debt for goods and services, net foreign loans, etc.) amounted to LTL 69.2 million.

The total net purchase of foreign exchange by the Bank of Lithuania from commercial banks made up USD 85.1 million in May; however, due to a lower reserve requirement ratio, international reserves contracted by LTL 122.2 million. On the other hand, Government inflows from the Eurobond issue resulted in a marked increase of the international reserves. In May these inflows amounted to LTL 1.1 billion.