2004-07-14
A sizeable contraction of the foreign trade deficit determined a corresponding change in the Balance of Payments current account deficit (CAD), which in May 2004 made up LTL 397.2 million. It contracted by LTL 588.4 million compared to April 2004, widening by LTL 101.1 million year-on-year.
Due to the changes in foreign trade statistics methodology, data collection system and sources as from May 2004, May data are not precisely comparable with the corresponding period last year. According to the data of the Department of Statistics (excluding the methodological differences and based on the calculations under the Special Trade System requirements), in May 2004, compared to April, export of goods decreased by 1.5 per cent, and import of goods by 20.3 per cent. The decline in import of goods was influenced by changes in terms of trade after Lithuania’s EU accession (changes in customs duties on some goods, etc.).
Compared to April, export of services increased in May 2004 by 5.2 per cent, while import of services remained relatively unchanged. The positive services balance increased by LTL 25.4 million and amounted to LTL 162.2 million. Year-on-year, export of services also increased by 5.2 per cent, while import of services grew by 22.1 per cent. The positive balance of services contracted over the period under review by LTL 36.7 million.
In May 2004, compared to April, payments to non-residents on their investment in Lithuania went down by LTL 114.3 million and amounted to LTL 119 million. Such developments were determined by the decline of dividend payments to non-residents on foreign direct investment in the private sector. The total income balance was negative in May 2004 at LTL 46 million. Compared to April, in went down by LTL 126.6 million, contracting, year-on-year, by LTL 293.3 million.
The balance of current transfers was positive in May 2004 at LTL 26.2 million. Compared to April, it contracted by LTL 42.5 million. The above development was influenced by Lithuania’s payments to the EU budget following Lithuania’s EU accession.
The positive capital and financial account balance made up LTL 381.1 million in May 2004. Excluding reserve assets, investment flows abroad by domestic economic entities (LTL 132.5 million) reflected net payments (outflows), and non-resident investment flows in Lithuania (LTL 376.1 million) total net inflows.
Foreign direct investment flows in Lithuania were positive in May 2004 (LTL 191.7 million), which was determined by non-resident investment in equity capital (acquisitions of qualifying holdings), reinvestment and loans received from investors. Taking into account foreign direct investment by domestic economic entities, net foreign investment inflows made up LTL 193.7 million in May.
Net portfolio investment flows were negative in May (LTL -98.4 million), resulting from the decline of non-resident investment in equity capital and the sale of part of Lithuanian eurobonds by non-residents to domestic commercial banks (as in April).
Other investment flows were positive in May (LTL 300.1 million). These investment inflows were determined by investment in the banking sector as a result of an increase in non-resident deposits and balances on correspondent accounts. Other investment flows were slowed down by the repayment of earlier foreign loans by the Government (LTL 94.6 million).
Reserve assets went down in May 2004. Reserve asset flows in the balance of payments were negative (LTL -131.9 million). The main reason behind the decrease was net purchase of foreign exchange by commercial banks from the Bank of Lithuania of LTL 373.2 million and an LTL 11.6 million decline in commercial bank required reserves in foreign currencies. The reserve assets were pushed up by Bank of Lithuania operations with central government institutions (LTL 203.5 million) and net inflows from investment in foreign currencies.