2020-03-23
Current account surplus – largest since joining the European Union
Today, the Bank of Lithuania published the balance of payments for Q4 2019, which shows that:
the current account balance (CAB) surplus contracted by more than 2.8 times over the year, to €1.2 billion or 9.8% of the gross domestic product (GDP). A year earlier, the CAB amounted to €440.5 million, or 3.7% of GDP (see Chart 1); this was a result of the surplus balance on services, secondary and primary income, which offset the 2.2 time decrease in the trade balance deficit. The CAB surplus in the fourth quarter was influenced by the balance of other primary incomes, which became positive due to the increase in European Union (EU) subsidies for agriculture;
the surplus on the capital account (€327.8 million) continued to build up due to transfers from EU funds used to finance investment projects;
net positive inflow of financial account investment, year on year, increased by 14.5%. and amounted to €1.2 billion or 9.3% of GDP (see Chart 2); It was driven by the net positive €2.1 billion flow of other investment which built up due to the increase in financial assets abroad and drop in liabilities to non-residents;
the negative international investment position amounted to €11.5 billion, or 23.7% of GDP at the end of Q4;
Lithuania’s gross external debt stood at €32.9 billion, or 68.1% of GDP, net debt – at €4.4 billion, or 9.2% of GDP at the end of Q4.
Chart 1. CAB and its composite flows as a percentage of GDP
Chart 2. Net financial account investment flows as a percentage of GDP
It should be noted that, when calculating the balance of payments for Q4 2019, quarterly and monthly balance of payments, international investment position and external debt data from Q1 to Q3 2019 were revised.
Detailed data on the balance of payments, international investment position, and foreign debt is available on the Bank of Lithuania website (under External Statistics).
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