2004-11-15
Current account balance. Compared to August, the current account deficit (CAD) widened by LTL 17.4 million in September to LTL 201.8 million. This development was mainly determined by a decline of the positive balance of services. According to preliminary estimates (based on monthly data), the CAD in the third quarter made up LTL 885.9 million (5.4% of quarterly (estimated) GDP)*. The CAD in Q1 and Q2 2004 stood at, respectively, 9% and 10.8% of GDP, and in Q3 2003 at 5% of GDP.
According to the preliminary data of the Department of Statistics, in September 2004, compared to August, export of goods increased by 12.3 per cent, while import of goods grew by 7 per cent. Year-on-year, export of goods went up by as much as 27.2 per cent, while import of goods increased by 11.9 per cent. However, regardless of the faster growth rate of the export of goods, the foreign trade deficit widened in Q3 by LTL 152.3 million year-on-year.
Export of services declined in September 2004 month-on-month by 13 per cent (mostly because of the decline in the export of travel services), and import of services went down by 10 per cent (owing to the increase in the import of transport services). The total positive balance of services decreased by LTL 33.5 million in September and amounted to LTL 109.5 million. Year-on-year, export of services increased by 10.2 per cent, while import of services grew by 18.4 per cent. The positive balance of services contracted over the period under review by LTL 17.8 million.
Payments to non-residents (on their investment in Lithuania) made up LTL 133.3 million in September 2004 (LTL 126.7 in August), while the income of domestic economic entities (on investment abroad) made up LTL 39.3 million (LTL 44.4 million in August). For the above reason, the total negative income balance widened by LTL 8.1 million against August (to LTL 60.1 million). Year-on-year it contracted by LTL 117 million*.
Owing to increased cash transfers from abroad by natural persons and transfers from EU support funds, the balance of current transfers went up in September, compared to August, by LTL 30.4 million (to LTL 11.7 million).
Capital and financial account balance. The total net investment flow, excluding international reserves, was negative (LTL -236.8 million) in September 2004, i.e. it reflected total net payments to non-residents. Funds in the capital account and net foreign direct investment covered 61 per cent of the September current account deficit.
Foreign direct investment flow in Lithuania was positive in September 2004 (LTL 119.9 million), which was determined by non-resident investment and other capital investment. Taking into account foreign direct investment by domestic economic entities, net foreign investment inflows made up LTL 106.3 million in September.
Net portfolio investment flow was positive in September (LTL 116.4 million), which was determined by the decline of investment of domestic commercial banks in non-resident short-term debt securities and higher non-resident investment in equities.
In contrast, other foreign investment net flow was negative (LTL -477.5 million). This was determined by the decline of Bank of Lithuania repurchase transactions with non-residents, the contraction of non-resident deposits at the Bank of Lithuania and foreign loans received on behalf of the state.
International reserves went down in September 2004. Their negative flow in the balance of payments stood at LTL 473.7 million. The main reason behind the decrease was an LTL 268.2 million decline in Bank of Lithuania repurchase transactions with non-residents and net purchase of foreign exchange by non-residents from the Bank of Lithuania of LTL 200.3 million. Reserves were also pushed down by Bank of Lithuania foreign exchange operations with commercial banks (LTL 40 million) and central government institutions (LTL 12.6 million).
* During the compilation of the Q3 2004 balance of payments, monthly data will be revised.