2005-07-12
Current account balance. In May 2005 the current account deficit (CAD) contracted by LTL 942.7 million compared to a month ago to LTL 125.7 million. This significant contraction of the CAD was mostly brought about by the decline of the trade deficit. The CAD in May was LTL 167.9 million lower than in the same period a year ago. According to preliminary data, the current account deficit in the period form January to May 2005 stood at LTL 2.02 billion (LTL 2.34 billion from January to May 2004).
According to the preliminary data of the Department of Statistics, in May 2005, compared to April, export of goods increased by 1.7 per cent, while import of goods declined by 20 per cent. Year on year, export of goods went up by 35.4 per cent, while import of goods increased by 24.1 per cent. The foreign trade deficit in May 2005 was 2.4 times lower than in April. These developments resulted from a significant decline of import of mineral products. Compared to April, import of mineral products went down by nearly 50 per cent.
Export of services increased in May 2005 by 6.7 per cent compared to April, and import of services contracted by 12.5 per cent. The total positive surplus of the balance of services increased by LTL 93.8 million in May and amounted to LTL 207.4 million. Compared to the period from January to May 2004, export of services increased during the five months this year by 10.5 per cent, while import of services grew by 24.1 per cent. The surplus of the positive balance of services declined over the period under comparison by LTL 126.9 million.
Payments to non-residents (on their investment in Lithuania) made up LTL 129.4 million in May 2005 (LTL 186.3 million in April), while the income of domestic economic entities on investment abroad made up LTL 53.1 million (LTL 43.9 million in April). Over the period under review the deficit of the investment income balance contracted by LTL 66.1 million, while the surplus of the compensation balance went down by LTL 15.7 million. Owing to the above changes, the total deficit of the income balance contracted in May by LTL 50.3 million compared to a month ago (to LTL 60.2 million).
The surplus of the balance of current transfers stood at LTL 168.5 million in May 2005 (LTL 149.7 million in April). This surplus of the balance of current transfers increased because of higher payments from EU support funds. In May 2004, the surplus of the balance of current transfers was lower by LTL 143.9 million and stood at LTL 24.6 million.
Capital and financial account balance. The total net flow of foreign investment by domestic economic entities, excluding international reserves, was positive (LTL 327.7 million) in May 2005, i.e. Lithuania’s investment abroad was higher than investment in Lithuania. Foreign investment flow in Lithuania (total net inflows) were LTL 702.7 million in May. The total net investment flow (both outward and inward investment) was LTL 255.5 million in May.
Foreign direct investment in Lithuania amounted to LTL 112.5 million in May 2005, LTL 966.74 million from January to May. Year on year, direct investment flow in Lithuania was lower by LTL 258.6 million over this period. Taking into account foreign direct investment by domestic economic entities, net foreign direct investment inflows made up LTL 116.9 million in May 2005, LTL 873.5 million from January to May. Net foreign direct investment flow made up 43.2 per cent of the CAD in the period from January to May.
Net portfolio investment flow showed net investment outflows in May 2005 of LTL 277.9 million, which was determined by increased investment of domestic commercial banks in non-resident debt securities and lower bank liabilities to non-residents.
Net other investment flow was positive in May 2005 at LTL 526 million. Foreign loans received by domestic commercial banks had the largest impact on the total positive flow of this investment.
International reserves continued to grow in May 2005. Their positive flow in the balance of payments stood at LTL 119.5 million, amounting to LTL 700.2 from January to May. International reserves grew due to higher credit institution balances with the Bank of Lithuania (LTL 125.9 million), an increase of currency outside the Bank of Lithuania (LTL 65.2 million), an increase of other foreign liabilities of the Bank of Lithuania (LTL 7.1 million) and the net increase of other liabilities of the Bank of Lithuania (LTL 2.6 million).
The factor reducing international reserves was the contraction of central government deposits with the Bank of Lithuania by LTL 70.8 million.