2006-07-17
Current Account Balance. In May 2006 the balance of payments current account deficit (CAD) made up LTL 641.4 million showing an increase of LTL 77.1 million (13.7%) compared to April. According to preliminary estimates, the CAD in January-May 2006 made up LTL 3 billion (LTL 1.9 billion in January-May 2005). Compared to April 2006, the foreign trade deficit increased in May 2006 by LTL 228.6 million; however, higher surpluses of the balances of current transfers and services offset the increase of the trade deficit by nearly two thirds.
According to the data of the Department of Statistics under the Government of the Republic of Lithuania, in May 2006, compared to April, export of goods increased by 14.9 per cent, while import of goods went up by 17.3 per cent (29.3% and 28.2% from January to May, respectively). The growth of the export and import of goods over the five months of the year were largely determined by a higher foreign trade volume in mineral products, machinery and mechanical appliances. Export to the EU Member States made up 63.2 per cent of the export of goods of Lithuania in January-May, while import from these countries made up 58.7 per cent. Export to the CIS countries made up 18.5 per cent, and import comprised 32.5 per cent.
Compared to April, export of services grew by 6.5 per cent in May 2006, while import of services remained unchanged, and the total surplus of the positive balance of services went up by LTL 46 million to LTL 222.9 million. From January to May export of services increased by 13.6 per cent, import of services grew by 24.9 per cent, and the total surplus of the positive balance declined by LTL 92.7 million.
Payments to non-residents (on their investment in Lithuania) made up LTL 264.8 million in May 2006 (LTL 260.5 million in April 2006), while the income of domestic economic entities on investment abroad made up LTL 70.5 million (LTL 54.1 million in April). As a consequence of a higher increase of inflows, the investment income balance deficit decreased by LTL 12.1 million. Including a lower positive balance of compensation of employees, the total income balance deficit was LTL 176.5 million in May 2006, and LTL 977.1 million in January-May (LTL 677 million over the respective period in 2005).
The surplus of the balance of current transfers stood at LTL 167.3 million in May 2006 (LTL 62.8 million in April). In May, transfers from EU support funds made up LTL 120 million (up by LTL 46.7 million compared to April). In addition, the transfers by natural persons were higher by LTL 20.3 million during the period under comparison. It was the factor that determined the overall increase of the surplus of current transfers in May. The surplus of the balance of current transfers was LTL 606.8 million in January-May 2006 (LTL 670.1 million in January-May 2005).
Capital and Financial Account Balance. In May 2006, the investment flow abroad by domestic economic entities, excluding official reserve assets, stood at LTL 747.5 million and the foreign investment flow in Lithuania made up LTL 1.76 billion. The total net investment flow (both outward and inward investment) showed capital inflows of LTL 1 billion in May. Over the five months of the year, total net capital inflows made up LTL 3.5 billion, of which 79.4 per cent consisted of net other investment inflows (mostly inflows in monetary financial institutions). In May 2006, capital transfers from EU support funds made up LTL 38.3 million, and LTL 300 million in January-May (LTL 390 million over the same period of 2005).
Foreign direct investment flow in Lithuania amounted to LTL 177 million in May 2006. Compared to April, direct investment flow in Lithuania increased by LTL 76.6 million in May. Over the period from January to May this flow was LTL 892.9 million (LTL 1.1 billion in January-May 2005). Taking into account foreign direct investment by domestic economic entities, net foreign direct investment flow made up LTL 121.6 million in May 2006, LTL 648.6 million from January to May.
Net portfolio investment flow was negative in May (LTL 384.1 million). This resulted from the fact that with the increased investment abroad, non-resident investment in Lithuania declined.
The net flow of other investment and financial derivatives was positive in the period under review (LTL 1.27 billion). The increase of loans received by domestic banks and non-resident deposits with domestic commercial banks had the largest impact on the total positive flow of this investment.
International reserves increased in May 2006. The flow of this increase in the balance of payments stood at LTL 295.6 million. The increase of international reserves was affected by higher Bank of Lithuania external liabilities and other monetary financial institution deposits with the Bank of Lithuania of LTL 281.5 million and LTL 177.9 million, respectively, in addition to other factors which went up by LTL 31.2 million.
The international reserves were pushed down by the contraction in central government deposits with the Bank of Lithuania and the decline of currency in circulation respectively by LTL 155.6 million and LTL 48 million.