Lithuania Announced Balance of Payments for August 2008
OREANDA-NEWS. October 13, 2008. Current Account Balance. In August 2008, the deficit on the Current Account of the Balance of Payments (CAD) made up LTL 614.7 million narrowing by LTL 99.3 million (13.9%) compared to July. This slump occurred due to a decrease in foreign trade deficit by a quarter, reported the press-centre of Bank of Lithuania.
In January-August 2008, CAD was LTL 10.7 billion (LTL 1.4 billion or 14.7% above the figure for corresponding period in 2007).
In August 2008, according to the data of the Department of Statistics under the Government of the Republic of Lithuania, export and import of goods shrunk respectively by 6.2% and 10.9% month on month, but grew year on year by 26.4% and 12.2%, respectively. In January-August 2008, export and import of goods increased year on year by 32.8% and 23.2%, respectively.
The export increase in January-August 2008 was mainly driven by a growth in exports of processed oil lubricants and lubricants received from bitumen minerals (2.3 times), fertilisers (96.6%), and grain (4 times). Import growth was driven mainly by an increase in import of crude oil and natural gas (2.5 times), railway locomotives, carriages and railcars and their parts (5.3 times), and fertilizers (2.4 times).
In January-August 2008, export of Lithuanian goods to the EU Member States accounted for 61.2% of total Lithuanian export of goods, while import from these countries made up 56.5% of total import of goods. Continued increase of foreign trade turnover with CIS countries led to an increase of the CIS share in foreign trade turnover. It accounted for 24.2% of the country’s export of goods, and 35% of import of goods.
In January-August 2008, the main Lithuania’s export partners were Russia (15.2 %), Latvia (11.3 %), Germany (7.2 %), and Poland (5.9 %), while the main import partners were Russia (31.2 %), Germany (11.6 %), Poland (9.9 %), and Latvia (5.1 %).
Export of services for August 2008 increased by 1.4% month on month, while import of services went up by 8.1% (export of services stayed unchanged year on year, while import of services grew by 11.4%). In January-August 2008, a year-on-year increase in export of services was 5.2%, while import of services jumped by 16.3%. In the reviewed period, gross surplus on the balance of services declined by 55.4%.
In August 2008, payments to non-residents (for their investments in Lithuania) made up LTL 427 million, and the income of domestic economic entities on investment abroad made up LTL 140.9 million. In August, the deficit on the balance of investment income stood at LTL 286 million.
In August 2008, with the compensation balance being positive, gross income balance deficit was LTL 253.6 million (LTL 248.6 million in July 2008). In January-August 2008, total income balance deficit made up LTL 3.1 billion, an increase of 14.1% compared to corresponding period in 2007.
In August 2008, the balance of current transfers posted a surplus of LTL 204.4 million ( LTL 248 million in July 2008). The total surplus on the balance of current transfers for the period from January to August 2008 made up LTL 1.7 billion (LTL 1.9 billion in corresponding period of 2007).
In January-August 2008, transfers from the EU support funds grew by 1.7% compared to corresponding period of 2007, and remittances by individuals went up by 2.9%. Transfers from the EU support funds accounted for 39.2% of total current transfers, while remittances by individuals accounted for 52.2%. Lithuania’s contributions to the EU budget soared by 26.2% during the reviewed period, and remittances by individuals from Lithuania went up by 8%.
Capital and financial account balance. In August 2008, gross investment by domestic economic entities, excluding official reserve assets, made up LTL 465.8 million, while gross inflow of foreign investment was LTL 845.3 million; eventually the net flow of total investment (taking into account investment outflow and inflow) recorded inflow at LTL 379.6 million.
In January-August, gross investment outflow equalled to LTL 3.06 billion, while gross foreign investment inflow made up LTL 9.05 billion. A year-on-year gross investment outflow by domestic economic entities went down by LTL 115.9 million or by 3.7%, while gross foreign investment inflow decreased by LTL 3.6 billion or 28.3%.
In August, non-repayable capital transfers made up LTL 186.6 million, while the January-August 2008 capital transfers made up LTL 1.6 billion (LTL 1.1 billion in January-August 2006).
In August 2008, foreign direct investment inflow in Lithuania amounted to LTL 512.5 million. Taking into account foreign direct investment outflow (they reached LTL 51.3 million) the net foreign direct investment flow in August was positive at LTL 461.2 million. In January-August 2008, foreign direct investment inflow amounted to LTL 2.4 billion, a decrease of 27.3% year on year.
In January to August of 2008, foreign direct investment was used to finance 15,6 % of CAD, while foreign direct investment along with non-repayable capital transfers accounted for 30.5 % of the CAD financing.
The net portfolio investment flow in August 2008 was negative at LTL 141 million. In January-August 2008, negative net flow of this type of investment amounted to LTL 1.15 billion, a slump of LTL 1.14 billion year on year, due to a decrease in investment into non-resident-issued debt and equity securities.
In August 2008, the net flow of other investments and financial derivatives was positive at LTL 59.3 million. The positive net flow showed that investment inflow was bigger compared to the outflow. This situation resulted from the growth of positive net investment flow in other sectors and contracted liabilities of the Bank of Lithuania.
In January-July 2008, the net flow of these investments was positive at LTL 5.47 billion showing the capital inflow. The year-on-year positive net flow of other investments however went down by LTL 3.6 billion mainly because of a decrease in liabilities of domestic MFIs and the Bank of Lithuania.
At the end of August 2008, official reserve assets made up LTL 15.5 billion (EUR 4.5 billion). In August, they increased by LTL 270.2 million or 1.8%.
Official reserve assets grew as a result of a rise of LTL 441.3 million in deposits of other MFIs with the Bank of Lithuania and an increase of LTL 152.3 million in currency in circulation, as well as a hike of LTL 84.1 million in other factors.
The growth of official reserve assets was pushed down by a decrease in central government deposits with the Bank of Lithuania and external liabilities of the Bank of Lithuania respectively by LTL 285.2 million and LTL 122.3 million.