2006-05-17
Current Account Balance. In March 2006, the Balance of Payments current account deficit (CAD) amounted to LTL 833.9 million and was more than twice larger than the deficit in February (LTL 404.8 million) and more than three times larger than in March last year. According to preliminary data, the current account deficit in the period from January to March 2006 stood at LTL 1.6 billion or 9.6 per cent of GDP (5.4 per cent of GDP from January to March 2005). Compared to February 2006, the foreign trade deficit was twice larger and the deficit of the income balance went up by 75 per cent in March. During the period under review, the surplus of the services balance and the surplus of the balance of current transfers increased, however, their increase offset less than a third of the increase of the trade deficit and the deficit of the income balance.
According to the data of the Department of Statistics, in March 2006 export of goods increased by 19.1 per cent, while import of goods grew by 30.1 per cent month on month. A rapid growth of the export of goods and the import of goods in March is largely explained by the increase of the foreign trade in mineral products, machinery and mechanical appliances and vehicles. Export to the EU states made up almost two thirds of the export of goods of Lithuania in the period from January to March, while import from these countries made up 57.9 per cent. Export to the CIS countries made up 17.3 per cent, and import comprised 33 per cent.
Month-on-month, export of services grew by 19.8 per cent, while import of services by 18.7 per cent, and the total surplus of the positive balance of services went up by LTL 28.6 million to LTL 148.7 million in March 2006.
Payments to non-residents (on their investment in Lithuania) made up LTL 232 million in March 2006 (LTL 161.7 million in February 2006), while the income of domestic economic entities on investment abroad made up LTL 55.2 million (LTL 47.3 million in February 2006). Owing to a larger increase in payments, the investment income balance deficit increased by LTL 62.5 million. Including the negative labour income balance, the total income balance deficit went up by LTL 77.2 million in March 2006, compared to February 2006, and comprised LTL 179.9 million.
The surplus of the balance of current transfers stood at LTL 211.6 million in March 20056 (LTL 69.9 million in February). In March, transfers from EU support funds made up LTL 251 million (up by LTL 188.6 million compared to February). It was the factor that determined the overall increase of the surplus of current transfers.
Capital and Financial Account Balance. In March 2006, the investment flow abroad by domestic economic entities, excluding official reserve assets, stood at LTL 799 million and the foreign investment flow in Lithuania made up LTL 547.4 million. The total net investment flow (both outward and inward investment) was LTL 251.6 million in March. Capital transfers from EU support funds made up LTL 132.4 million in March, and LTL 233.8 million in the period from January to March.
Foreign direct investment flow in Lithuania amounted to LTL 179.1 million in March 2006. Compared to February, direct investment flow in Lithuania increased by LTL 66 million in March. In the period from January to March, this flow made up LTL 401.6 million. Taking into account foreign direct investment by domestic economic entities, the net foreign direct investment flow in Lithuania made up LTL 124.5 million in March 2006.
Net portfolio investment flow was negative in March 2006 (LTL 579.4 million), i.e. claims increased more than liabilities to non-residents, which was determined by investment of monetary financial institutions and other sectors in non-resident securities and lower general government liabilities to non-residents.
The net flow of other investment and financial derivatives was positive in the period under review (LTL 203.4 million). The increase of non-resident deposits with domestic commercial banks had the largest impact on the total positive flow of this investment.
Official reserve assets went down in March 2006. The flow of this decrease in the balance of payments stood at LTL 979.1 million. The reduction of official reserve assets in March was affected by decreased central government and other monetary financial institution deposits with the Bank of Lithuania of LTL 716.5 million and LTL 279.7 million, respectively, while other factors reduced reserve assets by LTL 30.1 million.
The reserves were increased by higher foreign liabilities of the Bank of Lithuania (LTL 19 million) and a higher volume of currency in circulation (LTL 12.5 million).