OREANDA-NEWS. December 14, 2007. In October 2007, the deficit in the current account of the country’s balance of payments was LTL 786,5 million, showing an decrease of 17,8 percent compared to September, and an increase of 19,5 percent compared to CAD in October 2006, reported the press-centre of Bank of Lithuania.

In January-October 2007, CAD amounted to LTL 9,7 billion, 44,3 percent above the figure for corresponding period of 2006. The rise was a result of the growth of foreign trade deficit by LTL 2,1 billion, which accounted for nearly three thirds of the gross increase in CAD.

In October 2007, according to the preliminary data of the Department of Statistics under the Government of the Republic of Lithuania, export and import of goods went up respectively by 3,8 and 1,0 percent month on month.

In January-October 2007, a year-on-year rise in export and import of goods was higher respectively by 10,3 and 14,5 percent, while foreign trade deficit widened by 26,9 percent to make up LTL 14,2 billion. The export growth was mainly driven by an increase in exports of plastics and plastic articles (84,5%), fertilisers (45,1%), ground transport vehicles (28%), machinery and mechanical equipment (24,5%). Meanwhile, the growth of import was driven by increasing import of ground transport vehicles (44,1%), organic chemical products (2,5 times), and electric machinery and equipment (21,5%).

In January-October 2007, export of goods of Lithuania to the EU25 countries rose by 14,1 percent, while import grew by 27,4 percent. The Lithuania’s export to CIS countries went up by 29 percent, while import from these countries went down by 15,2 percent.

In January-October 2007, the Lithuania’s major export partners were Russia (14,7 %), Latvia (13,0 %), Germany (10,7 %), and Poland (6,4 %), while the major import partners were Russia (17,8 %), Germany (15,1 %) and Poland (10,4 %).

In October 2007, a month-on-month growth of export of services made up 2,3 percent, import of services accounted for 3,5 percent, eventually, the total positive surplus of the balance of services decreased by 15,6 per cent to LTL 217,3 million. In January-October 2007, compared to the same period in 2006, the country’s export and import of services grew respectively by 5,2 percent and 16,8 percent. The positive surplus of the balance of services for January-October 2007 declined by LTL 523,9 million or 21 percent.

In October 2007, payments to non-residents (on their investment in Lithuania) made up LTL 424,9 million, while the income of domestic economic entities on investment abroad made up LTL 119,9 million. In October, the deficit in the balance of investment income formed LTL 305 million, a decrease of 7,5 percent compared to September. Although the balance of compensation income was negative at LTL - 2,8 million, gross income balance deficit for October 2007 decreased by 4,3 percent (amounted to LTL 307,8 million).

In January-October 2007, year on year, the country’s deficit of income balance rose by 53 percent up to LTL 3,1 billion.

The surplus in the balance of current transfers stood at LTL 333,4 million in October 2007 (LTL 245,3 million in September of the same year). The growth of surplus was driven by a two-fold increase in transfers from EU support funds, mostly to finance rural development programs of the agricultural fund.

In January-October 2007, positive surplus on the balance of current transfers increased by LTL 755,2 million, 44,2 per cent year on year, to make up LTL 2,5 billion . Over the reported period, transfers from the EU support funds grew by 36,4 percent, while remittances by individuals went up by 41 percent.

Capital and financial account balance. In October 2007, a decrease was registered in the investments of domestic economic entities abroad, excluding official reserve assets, and their flow made up LTL 738,1 million. In Lithuania, foreign investment flow reached LTL 3,5 billion, therefore total net investment flow taking into account outward and inward investment flows formed LTL 4,3 billion. Debt securities spreaded by the Government of the Republic of Lithuania accounted nearly for the half of the total net investment flow.

In January-October 2007, the outward investment flow equalled to LTL 3,6 billion, while the inward investment flow was LTL 18 billion in Lithuania. Year on year, the outward investment flow grew by 17,6 percent, while inward investment flow went up by 63,3 percent. In October, non-repayable capital transfers made up LTL 180.7 million, while in January-October they amounted to LTL 1,3 billion (LTL 654,8 million in January-October 2006).

In October 2007, foreign direct investment flow in Lithuania reached LTL 279,2 million. Taking into account foreign direct investment by domestic economic entities, net foreign direct investment flow in October made up LTL 439,7 million. Meanwhile, January-October foreign direct investment flow in Lithuania reached LTL 4,1 billion (LTL 2.4 million in corresponding period of 2006) , while their net flow was LTL 3,6 billion litas.

In October 2007, the net portfolio investment flow made up LTL 1,8 billion, as a result of the above mentioned new issue of the Government securities. In January-October 2007, the net flow of portfolio investment made up LTL 942,9 million.

The net flow of other investments and financial derivatives was positive both in October, when it made up LTL 2,1 billion, while in January-October, it reached LTL 11,7 billion. The net flow of other investments grew by 59,4 percent year on year. The increase of liabilities of domestic MFIs had the largest impact on the total positive flow of this type of investment. The net flows of other investments of this sector reached LTL 10 billion in January-October 2007, an increase of nearly two times compared to the corresponding period of 2006.

At the end of October 2007, official reserve assets made up LTL 19,6 billion (EUR 5,7 billion or USD 8,2 billion). They grew in October and their flow in the balance of payments made up LTL 3,3 billion. The growth of official reserve assets was driven by an increase of LTL 2,77 billion in the central government deposits with the Bank of Lithuania. Also, the official reserve assets increased due to the growth of other MFIs deposits with the Bank of Lithuania and an increase of currency in circulation by LTL 402,5 million and LTL 113,1 million, respectively, and a rise of LTL 59,5 million in other factors. In October, official reserve assets went down by LTL 3,7 million due to a change in external liabilities of the Bank of Lithuania.