2005-12-14
Current account balance. In October 2005, compared to September, the current account deficit (CAD) of Lithuania increased by LTL 195.5 million to make up LTL 565.9 million. The widening of the current account deficit in October was determined by a decline in the positive surplus of current transfers and an increase in foreign trade deficit. According to preliminary data, in January trough October CAD amounted to LTL 3.68 billion (January trough October 2004 - LTL 4.07 billion).
According to the data of the Department of Statistics under the Government of the Republic of Lithuania, exports of goods decreased by 0.7 per cent and imports of goods grew by 1.1 per cent in October compared to September 2005.The foreign trade deficit was 7.2 per cent higher in October 2005 than in September. In January trough October 2005, exports of goods increased by 25.8 per cent and imports of goods by 23.2 per cent, compared to the same period last year. In January trough October this year, two-thirds of Lithuania’s exports of goods and 58.8 per cent of the imports of goods accounted for the EU countries. On the other hand, exports and imports of goods grew most vigorously trading with the CIS countries during this period.
In October 2005, compared to September, exports of services declined by 3.6 per cent, while imports of services remained nearly unchanged. The total positive surplus in the balance of services declined by LTL 24.8 million to amount to LTL 207 million in October. Over ten months of 2005, exports of services rose by 17.6 per cent and imports of services by 21.6 per cent, compared to the same period in 2004. The positive surplus in the balance of services improved by LTL 194 million over the period under review.
Payments to non-residents (on their investment in Lithuania) made up LTL 140.1 million in October 2005 (LTL 172 million in September), while the income of domestic economic entities on investment abroad made up LTL 49.2 million (LTL 48.6 million in September). As a result, the deficit of the investment income balance narrowed by LTL 32.4 million. The surplus in the compensation of employees balance increased by LTL 8.4 million in October. The total deficit of the income balance went down by LTL 40.8 million in October, compared to September, to amount to LTL 53.1 million.
The surplus in the balance of current transfers stood at LTL 54.7 million in October 2005 (LTL 186.2 million in September). The decrease in the surplus of current transfers was determined by a decline in the payments from the EU structural support funds by LTL 139.4 million. Over ten months of 2005, the surplus of the balance of current transfers made up LTL 1.37 billion (LTL 486.1 million above the figure for the same period a year ago). The reason behind this increase was higher transfers from the EU support funds; another important source of this increase were higher transfers of natural persons.
Capital and financial account balance. Investment by domestic economic entities abroad, excluding official international reserves, decreased (the net flow of this decrease made up LTL 273.3 million), while foreign investment in Lithuania increased (the net flow of this increase stood at LTL 451.5 million) in October 2005. In addition, non-repayable capital transfers from abroad (from the EU support funds) made up LTL 27.3 million in October. The total net investment flow (both outward and inward investment flows) made up LTL 752.1 million in October (LTL 769.1 million in September).
In October 2005, foreign direct investment in Lithuania amounted to LTL 105.7 million, in January trough October - LTL 1.32 billion. Year-on-year, the flow of foreign direct investment in Lithuania contracted by LTL 519 million. Taking into account foreign direct investment by domestic economic entities, net foreign direct investment inflows made up LTL 47.8 million in October and LTL 768.2 million in January trough October 2005.
In October 2005, the net investment flow reported about a decline in liabilities to non-residents by LTL 229.5 million. This stemmed from a decrease in the public sector liabilities to non-residents (redemption of debt securities).
The net flow of other investment was positive in October 2005 at LTL 906.5 million). The highest impact on the total positive flow of this investment came from a decline in domestic commercial banks’ deposits and correspondent account balances with foreign banks as well as from a rise in foreign bank time deposits with domestic banks.
In October 2005, the international reserve flow in the balance of payments made up LTL 156.3 million, but due to the exchange rate fluctuations and revaluation of gold the international reserves increased by LT 125.3 million (1.2 %).In October, the international reserves grew owing to an increase in the currency outside the Bank of Lithuania and funds of credit institutions with the Bank of Lithuania by respectively LTL 151.2 million and LTL 106.8 million, as well as due to an increase in the Bank of Lithuania foreign liabilities by LTL 91.4 million.
The international reserves were pushed down by a net contraction in central government deposits with the Bank of Lithuania and in the Bank of Lithuania’s other liabilities by respectively LTL 180.4 million and LTL 43.7 million.