OREANDA-NEWS. On 02 April 2009 was announced, that In January 2009, the deficit on the Current Account of the Balance of Payments (CAD) made up LTL 104.3 million narrowing by LTL 747.1 million (87.8%) month on months or by LTL 1.7 billion (94.1%) year on year. The CAD decrease was largely driven by a decrease in foreign trade deficit.

In January 2009, according to the data of the Department of Statistics under the Government of the Republic of Lithuania, export and import of goods decreased respectively by 9.3% and 29.4% month on month. Compared to January 2008, country?s export decreased by 14.6% and import went down by 40.6% (excluding mineral products, export and import of goods decreased respectively by 22.3% and 43.2 %).

In January 2009, the deficit on the foreign trade balance narrowed by LTL 1 billion or 92.9% month on month to LTL 79 million and by LTL 1.7 billion or by 95.5% year on year. In the Balance of Payments, the data for export and import of goods are valued according to FOB (“free on board”), while in case of foreign trade statistics the data for export are valued according to FOB and the data for import are valued according to CIF ("cost, insurance and freight"). The differences in the valuation, lead to differences in values of import of goods and foreign trade balance presented in the Balance of Payments and foreign trade statistics. This was the major reason for surplus of foreign trade balance on the Balance of Payments in January 2009. On the other hand, the difference in the value of import, that shows up in the Balance of Payments is included into import of services so that the said differences in values do not have major impact on the final size of the current account balance.

In January 2009, export of goods fell as a result of a decrease in export of fertilizers by 44.9 %, ground vehicles by 45.2 %, and electrical machinery and equipment by 48.2%. Import was decreasing mainly as a result of a fall in import of ground vehicles by 75.9 %, natural gas by 25.1%, electrical machinery and equipment by 59.8 %.

Export of goods from Lithuania to EU member states narrowed by 19.7% and export to CIS countries decreased by 28.2% year on year in January 2009. During the same period, import of goods from EU fell by 44.9%, while import from CIS countries fell by 33.2%.
Export of services went down by 34.5%, while import of services declined by 29.4% month on month in January 2009 (a year-on-year decrease in export and import of services made up respectively 31.1% and 33.6%). In January 2009, the balance on services was positive and made up LTL 11.5 million (in January 2008, balance on services was negative - LTL 8,2 million).

In January 2009, payments to non-residents on their investment in Lithuania made up LTL 345.7 million, while earnings by domestic economic entities on investment abroad made up LTL 171.3 million. The deficit on income balance reached LTL 174.4 million in January. Considering the positive balance of compensation of employees, gross income balance deficit made up LTL 158.1 million (in January 2008, it was LTL 284 million). This contraction was largely driven by the narrowing of the deficit on foreign direct investment income.

The current transfer balance was negative in January 2009 standing at LTL 22.2 million, while current transfer balances for all the months during the period from 2007 to 2008 were showing surplus (in January 2008 the balance surplus made up LTL 18.1 million, and in December the same year, it amounted to LTL 133.8 million).

In January 2009, transfers from EU support funds showed LTL 1.7 million and remittances by private individuals made up LTL 160.5 million. Meanwhile, in January 2008, the said transfers and remittances amounted to LTL 52.6 million and LTL 175.8 million, respectively.

In January 2009, Lithuania's contributions to the EU budget decreased by 16.7% year on year and remittances by individuals from Lithuania went up by 5.1%.

Capital and financial account balance. In January 2009, the outflow of investment by domestic economic entities, excluding official reserve assets, showed LTL 0.6 million, while gross foreign investment inflow to Lithuania was negative (LTL 1.1 billion), i.e. showed investments going down. Net flow of all investments therefore, including investment inflow and outflow, also was negative (LTL 1.1 billion). Gross outflow of investments by domestic economic entities went up by LTL 317 million and gross inflow of investments slumped by LTL 1.3 billion year on year.

There were no non-repayable capital transfers to Lithuania in January 2009. (In January 2008, the flow of this type of transfers made up LTL 284.9 million).

In January 2009, foreign direct investment inflow was negative standing at LTL 160.9 million. A decrease in share capital owned by non-residents was the major reason for outflow of foreign direct investments in Lithuania. Net flow of foreign direct investments, including direct investment outflow by domestic economy entities, which grew by LTL 1.7 million, was negative too standing at LTL 162.6 million. In January 2008, inflow of foreign direct investment was positive amounting to LTL 99.7 million, and outflow of foreign direct investment was LTL 169.1 million. Net flow of foreign direct investments was negative making up LTL 69.4 million.

Net flow of portfolio investment was negative (reflecting bigger outflow of this type of investment) amounting to LTL 57.9 million in January 2009. Negative flow of portfolio investment was largely driven by the MFIs' investment into non-resident debt securities and a decrease in liabilities of other sectors. In January 2008, net flow of portfolio investment was negative and made up LTL 32.4 million.

Net flow of other investments and financial derivatives was negative in January 2009 standing at LTL 841.8 million, largely reflecting a decrease in liabilities of central government and MFIs. Compared to January 2008, net inflow of other investments and financial derivatives decreased by LTL 1.5 billion.

At the end of January 2009, official reserve assets made up LTL 15 billion (EUR 4.3 billion). During the month they decreased by LTL 780.8 million or 4.9%.

Official reserve assets fell as a result of a slump of PFIs’ deposits with the central bank and net cash in circulation respectively by LTL 582.7 million and LTL 510 million. Official reserve assets were also pushed down by a decrease in central government deposits with the Bank of Lithuania by LTL 108.2 million.

The decrease of official reserve assets was partially offset by an increase of external liabilities of the Bank of Lithuania and other factors respectively by LTL 225.3 million and LTL 194.7 million.