Bank of Lithuania

In May 2003, the Balance of Payments current account balance was negative amounting to LTL 124.2 million. Compared to April, the current account deficit (CAD) narrowed by LTL 503.3 million (more than five times), and compared to May 2002, by 50.8 per cent. Such CAD development was determined by a 45.8 per cent contraction of the foreign trade deficit and a nearly four-fold increase in the balance of current transfers. Changes in other current account items were not significant.

According to the preliminary data of the Department of Statistics, in May 2003, compared to April 2003, export of goods increased by 19.2 per cent, while import contracted by 8 per cent. In May 2003, compared to the same period last year, export of goods declined by 7.9 per cent, and import by 12.4 per cent. The above developments were determined by the export of mineral products and vehicles.

Compared to April 2003, export of services increased in May by 10.5 per cent, while import of services went down by 11.8 per cent. The positive balance of services amounted to LTL 198.7 million (LTL 123.6 million in April). Compared to May 2002, export of services decreased by 6.6 per cent, while import of services contracted by 20.3 per cent. The positive balance of services improved over the period under comparison by LTL 31.1 million.

Payments to non-residents on investment in Lithuania made up LTL 176.6 million in May 2003, and, compared to April, increased by LTL 44.4 million. As a result, the negative income balance (LTL 140 million) was 51.1 per cent higher than in April this year and 10.1 per cent higher than in May last year.

The total positive balance of current transfers increased by as much as LTL 149.2 million compared to April 2003.

The positive capital and financial account balance made up LTL 293.3 million in May. Foreign assets of domestic economic entities (financial claims to non-residents), excluding reserve assets, increased by LTL 49 million, while international financial liabilities went up by LTL 209.0 million. The balance of capital transfers amounted to LTL 36.2 million.

Foreign assets of domestic commercial banks increased by LTL 24.2 million. The largest increase was recorded in commercial bank deposits and correspondent accounts with foreign banks. Foreign assets of other sectors went up by LTL 24.8 million.

Foreign direct investment flows were LTL 133 million in Lithuania. Compared to April, they increased by LTL 35 million.

Non-resident portfolio investment went up by LTL 116 million (down by LTL 690.3 million in April).

Other non-resident investment declined by LTL 33.9 million.

The negative reserve asset flows in the Balance of Payments were LTL 97 million in May 2003. The main reason behind the decrease was the operations of the Bank of Lithuania with central government institutions, which pushed the reserves down by LTL 122.1 million, and the contraction of repurchase transactions with non-residents by LTL 89.0 million. The reserves were also reduced by the decline of the US dollar against the litas. Reserve assets were pushed up by the net purchase of foreign exchange of LTL 34.2 million from commercial banks, the rising prices in the securities market and the net income from Bank of Lithuania investment in foreign exchange.