Bank of Lithuania

Current account balance. In February 2005 the current account deficit (CAD) widened by LTL 305.7 million month-on-month to LTL 402.4 million. The widening of the CAD was mostly determined by the widening of the foreign trade deficit. Year-on-year the CAD widened more than 1.5 times. In January-February 2005, the CAD amounted to LTL 499.1 million and, compared to January-February last year, it widened by LTL 29.4 million.

According to the preliminary data of the Department of Statistics, in February 2005, compared to January, export of goods decreased by 9.7 per cent, while import of goods grew by 5.1 per cent. Year-on-year, export of goods went up by 9.1 per cent, while import of goods increased by 9.8 per cent.

Compared to January, export of services increased by 15.8 per cent, while import of services went up by 23.2 per cent, and the total surplus of the positive balance of services declined by almost LTL 5 million to LTL 104.2 million in February 2005. Year-on-year, export of services increased by 1.7 per cent, while import of services grew by 16.3 per cent. The surplus of the positive balance of services declined over the period under review by LTL 43.9 million.

Payments to non-residents (on their investment in Lithuania) made up LTL 169.2 million in February 2005 (LTL 113.7 million in January), while the income of domestic economic entities (on investment abroad) made up LTL 44.5 million (LTL 42.5 million in January). The deficit of the investment income balance increased by LTL 53.4 million over the period under review, while the surplus of the compensation balance went down by LTL 6.9 million. Due to the above changes, the total deficit of the income balance widened by LTL 60.3 million against January (to LTL 85.5 million).

The surplus of the balance of current transfers was LTL 69.2 million in February 2005 (in January, the deficit of this balance was LTL 45 million). This surplus of current transfers resulted due to payments from the EU structural funds higher by LTL 35.9 million and lower contributions to the EU budget. In February 2004, the surplus of the balance of current transfers was higher by LTL 10.8 million and stood at LTL 80 million.

Capital and financial account balance. In February 2005, the total investment flow abroad by domestic economic entities, excluding international reserves, stood at LTL 457 million and the foreign investment flow in Lithuania (total net inflows) made up LTL 999 million.

Foreign direct investment flow amounted to LTL 204.6 million in February 2005. In February, this flow was slightly higher than in January, and year-on-year it went up by LTL 27.1 million. Taking into account foreign direct investment by domestic economic entities, net foreign direct investment inflows made up LTL 189.8 million in February 2005. Net foreign direct investment flow amounted to LTL 47.2 million in February.

Net portfolio investment flow showed net inflows in February 2005 (LTL 932.4 million), which was determined by increased non-resident investment in Government debt securities. In February, the new Government Eurobond issue (LTL 2.07 billion) was distributed and the earlier Eurobond issue was redeemed from non-residents (for LTL 1.12 billion).

Net other investment flow was negative in February 2005 (LTL -572.5 million). The decline of non-resident deposits in domestic commercial banks and the Bank of Lithuania determined the negative total flow of this investment.

International reserves continued to grow in February 2005. Their positive flow in the balance of payments stood at LTL 201.8 million. International reserves grew due to the increase of central government deposits at the Bank of Lithuania (LTL 289.3 million), an increase of the volume of currency issued by the Bank of Lithuania (LTL 107.7 million) and higher other net liabilities of the Bank of Lithuania (LTL 19.7 million).

Reserves were pushed down by the lower balances of credit institutions with the Bank of Lithuania (LTL 115.8 million) and a decline of Bank of Lithuania foreign liabilities.