2006-04-12
Current Account Balance. In February 2006, the Balance of Payments current account deficit (CAD) amounted to LTL 404.8 million and was almost equal to the CAD in January (LTL 399.1 million); however, it was LTL 23.4 million lower than in February last year. Compared to January 2006, the foreign trade deficit and the deficit of the income balance decreased in February, while the surplus of the services balance increased; however, the surplus of the balance of current transfers declined.
According to the data of the Department of Statistics under the Government of the Republic of Lithuania, export of goods increased by 5.2 per cent and import of goods went up by 3.4 per cent in February 2006, compared to January; therefore, the foreign trade deficit was 3.8 per cent lower in February. Export to the EU states made up approximately two thirds of the export of goods of Lithuania in January and February, while import from these countries made up 57.7 per cent. Export to the CIS countries made up 16.7 per cent, and import comprised 32.4 per cent.
Compared to January, export of services increased by 4 per cent in February 2006, while import of services went down by 0.6 per cent, and the total surplus of the positive balance of services increased by LTL 24.6 million to LTL 120.1.
Payments to non-residents (on their investment in Lithuania) made up LTL 161.7 million in February 2006 (LTL 191.1 million in January 2006), while the income of domestic economic entities on investment abroad made up LTL 47.3 million (LTL 62.6 million in January). As a consequence of a major decline of payments to non-residents, the investment income balance deficit decreased by LTL 14.1 million. The total deficit of the income balance, including a higher surplus of the compensation of employees balance, decreased by nearly LTL 20 million to LTL 102.8 million in February 2006, compared to January 2006.
The surplus of the balance of current transfers stood at LTL 69.9 million in February 2006 (LTL 152.4 million in January). In February, transfers from EU support funds made up LTL 62.4 million (down by LTL 72.5 million compared to January). Transfers by individuals also decreased over the period under review. Due to the two above factors, the total surplus of current transfers declined.
Capital and Financial Account Balance. In February 2006, the investment flow abroad by domestic economic entities, excluding official reserve assets, stood at LTL 139.2 million and the foreign investment flow in Lithuania made up LTL 1.39 billion. The total net investment flow (both outward and inward investment) was LTL 1.25 billion in February. Capital transfers from EU support funds made up LTL 25.3 million, and LTL 101.3 million in January and February.
Foreign direct investment flow in Lithuania amounted to LTL 113.1 million in February 2006. Compared to January, direct investment flow in Lithuania increased by a mere LTL 3.7 million in February. Taking into account foreign direct investment by domestic economic entities, the net foreign direct investment flow in Lithuania made up LTL 70 million in February 2006, LTL 1.7 billion year on year.
Net portfolio investment flow made up LTL 1.22 billion in February 2006 marking a major increase of liabilities to non-residents compared to claims. The latter developments were determined by the Government Eurobond issue of LTL 1.38 billion. The major part of portfolio investment flow abroad consisted of MFI investment in non-resident debt securities.
The net flow of other investment and financial derivatives was negative during the period under review (LTL 40.4 million). The largest impact on the total negative flow of this investment was determined by the decline of Bank of Lithuania repurchase agreements.
Official reserve assets, whose flow in the balance of payments amounted to LTL 762.6 million in February 2006, continued to increase. The growth of official reserve assets in February was affected by increased central government and other financial institution deposits with the Bank of Lithuania of LTL 449.5 million and LTL 395 million, respectively. The official reserve assets also increased because of a higher volume of currency in circulation (LTL 88.7 million) and a net increase of other liabilities of the Bank of Lithuania (LTL 46.3 million).
The factor reducing reserve assets was the contraction Bank of Lithuania external liabilities by LTL 185.8 million.