2004-12-13
Current account balance. Compared to September, the current account deficit (CAD) widened by LTL 22.8 million in October 2004 to LTL 224.6 million. The widening of the CAD in was mostly determined by the widening of the foreign trade deficit. The widening was not offset by increased surpluses in services and current transfer balances. In October 2003 the CAD amounted to LTL 238.5 million.
According to the preliminary data of the Department of Statistics, in October 2004, compared to September, export of goods increased by 5.1 per cent, while import of goods grew by 7.3 per cent. Year on year, export of goods went up by 16.7 per cent, while import of goods increased by 6.3 per cent.
Compared to September, export of services grew by 4.5 per cent (mostly due to higher export of transport services), while import of services declined by 0.3 per cent, and the total surplus of the positive balance of services went up by LTL 26.6 million to LTL 136.1 million in October 2004. Year-on-year, export of services increased by 30.4 per cent, while import of services grew by 27.7 per cent. The surplus of the positive balance of services improved over the period under review by LTL 38.9 million.
Payments to non-residents (on their investment in Lithuania) made up LTL 136.1 million in October 2004 (LTL 133.3 in September), while the income of domestic economic entities (on investment abroad) made up LTL 47.6 million (LTL 39.3 million in September). Over the period under review the deficit of the investment income balance contracted by LTL 5.5 million, while the surplus of the compensation balance went down by LTL 7.2 million. Due to the above changes, the total deficit of the income balance widened by LTL 1.7 million against September (to LTL 61.8 million).
Owing to increased cash transfers from EU support funds and other transfers from abroad by legal persons, the surplus in the balance of current transfers went up in October, compared to September, by LTL 96.5 million (to LTL 108.1 million).
Capital and financial account balance. The total net investment flow, excluding international reserves, was positive (LTL 216.4 million) in October 2004, i.e. it reflected total net foreign inflows. The capital account and net foreign direct investment flow exceeded the current account deficit by a factor of 1.8 in October 2004.
Foreign direct investment flow amounted to LTL 372 million in October 2004, increasing over three times against September. Such developments were determined by non-resident investment in the electricity, gas and water supply activity (investment in new equity issues). Taking into account foreign direct investment by domestic economic entities, net foreign direct investment inflows made up LTL 368.4 million in October 2004.
Net portfolio investment flow was negative in October 2004 (LTL -200.9 million), which was determined by the increased investment of domestic commercial banks in non-resident debt securities and lower non-resident investment in the equities of domestic economic entities.
In contrast, net flow of other foreign investment was close to balance (LTL 6.9 million) in October 2004. The above development was determined by the decline of balances of domestic commercial banks in deposit and correspondent accounts with foreign banks, fewer repurchase transactions of the Bank of Lithuania with non-residents and the decline of non-resident deposits with the Bank of Lithuania.
International reserves increased in October 2004. Their positive flow in the balance of payments stood at LTL 36 million. The main reason behind the increase was Bank of Lithuania foreign exchange operations with commercial banks, which pushed the reserves up by LTL 415.5 million. Net purchase of the foreign exchange by the Bank of Lithuania from commercial banks was LTL 390.9 million in October 2004. Reserves were pushed down by Bank of Lithuania foreign exchange operations with central government institutions (LTL 197.3 million) and non-residents (LTL 175.8 million).