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Lithuania's official reserve assets up by EUR 232 mln in June

BC, Vilnius, 14.08.2014.Print version
In June 2014, the build-up of the current account balance (CAB) in surplus (LTL 694.8 million, or EUR 201.2 million) was driven by declines in the trade and primary income balances deficits. The positive financial account balance (LTL 627.6 million, or EUR 181.8 million) was due to the large positive flow of net portfolio investment and of the growing official reserve assets, said the Bank of Lithuania in a statement, cites LETA/ELTA.

An LTL 694.8 million (EUR 201.2 million) CAB surplus, which built up in the country's balance of payments (BOP) in June 2014, was 62% larger than in May (LTL 428.8 million or EUR 124.2 million). The build-up of the balance in surplus in June was due to declines in the trade balance deficit (LTL –170.4 million, or EUR –49.4 million) and primary income balance deficit (LTL –367 million, or EUR –106 million). According to preliminary estimates, in April-June 2014 the CAB surplus amounted to LTL 957.7 million (EUR 277.4 million), or 3.1% of GDP, while in January-June 2014 – LTL 974.9 million (EUR 282.3 million), or 1.7% of GDP. In June 2013, the CAB surplus amounted to LTL 1.4 billion (EUR 405 million), in April-June – LTL 1.5 billion (EUR 434 million).

 

In June 2014, the foreign trade deficit amounted to LTL 170.4 million (EUR 49.4 million), narrowing by LTL 318.7 million (EUR 92.3 million) month on month. Export of goods boosted by 3.8%, while import of goods shrank by 0.8% in the reference period.

 

In January-June 2014, the trade balance deficit widened by LTL 894.2 million (EUR 259 million), or 59.6% year on year. Export and import of goods shrank by 4.3% and 1.9% respectively in the reference period.

 

As in June 2014 growth in the export of services (9.5%) slightly outpaced growth in the import of services (9.3%), the balance of services surplus widened by LTL 41.4 million (EUR 11.2 million), or 10.2% month on month. Year on year, the balance of services surplus narrowed by LTL 187.7 million (EUR 54 million), or 29.5%. In January-June 2014, export of services expanded by 3.3%, while import of services – 5.4%; as a result, the balance of services surplus narrowed by 1.9% year on year.

 

In June 2014, the total deficit on the primary income balance (LTL 367 million, or EUR 106 million) narrowed by LTL 78.4 million (EUR 22.7 million) month on month. This narrowing was due to the narrowing in the investment income balance deficit (LTL 415.1 million, or EUR 120.2 million) and widening in the surplus balance of other primary income (LTL 82.2 million, or EUR 23.8 million).

 

In June 2014, the investment income balance deficit narrowed by LTL 41.8 million (EUR 12.1 million), or 9.2% month on month. This narrowing stemmed from the narrowing in the deficits of total investment income balances and growth in official reserve assets income. In June 2014, the investment income balance deficit narrowed by LTL 16.5 million (EUR 4.8 million or 3.8%) year on year.

 

The current transfers balance surplus amounted to LTL 784.1 million (EUR 227 million) in June 2014 and LTL 956.6 million (EUR 277 million) in May. In January-June 2014, the current transfers balance surplus (LTL 2.7 billion, or EUR 782 million) increased by LTL 88.8 million (EUR 25.7 million), or 3.4% year on year.

 

Transfers from European Union (EU) support funds amounted to LTL 586.5 million (EUR 169.8 million) and Lithuania's calculated contributions to the EU budget – LTL 84.6 million (EUR 24.5 million) in June 2014. Month on month, transfers from EU support funds declined by 20.6% and Lithuania's calculated contributions to the EU budget – 10%.

 

Personal transfers from abroad amounted to LTL 443.3 million (EUR 128.4 million), while personal transfers from Lithuania – LTL 167.1 million (EUR 48.4 million) in June 2014. Month on month, personal transfers from abroad contracted by 3.4%, while personal transfers from Lithuania increased by 8.1%. During the six months of the current year, personal transfers from abroad amounted to LTL 2.5 billion (EUR 724 million), while personal transfers from Lithuania – LTL 972.8 million (EUR 281.7 million). Year on year, personal transfers from abroad boosted by 31.1%, while personal transfers from Lithuania – 6.1%.

 

The surplus capital account balance amounted to LTL 613.4 million (EUR 177.7 million) in June and LTL 2.2 billion (EUR 637 million) in January-June 2014. It built up due to the inflows of capital transfers for financing investment projects.

 

The negative change in net investment (LTL 174.1 million, or EUR 50.4 million) in the BOP financial account, excluding official reserve assets, for June 2014 was due to the negative change in net other investment (LTL 2 billion, or EUR 579 million). The positive change in net investment (LTL 759.5 million, or EUR 220 million) in January-June 2014 was due to growth in net other investment.

 

Growth in net direct investment (DI) in June 2014 amounted to LTL 87.4 million (EUR 25.3 million) (in May, there was a decrease of LTL 304.7 million, or EUR 88.2 million); it was driven by a decrease in other sectors' incurrence of equity and debt securities liabilities to non-residents. The DI net incurrence of liabilities to non-residents posted a decline of LTL 97.7 million (EUR 28.3 million) in June and a rise in the net incurrence of liabilities to non-residents of LTL 140 million (EUR 40.5 million) in January-June 2014. In June 2014, the decline in Lithuania's DI net acquisition of financial assets abroad amounted to LTL 10.4 million (EUR 3 million), although in May the assets boosted by LTL 62 million (EUR 18 million). In January-June 2014, Lithuania's DI net acquisition of financial assets abroad boosted by LTL 11 million (EUR 3.2 million) year on year.

 

In June 2014, net portfolio investment posted an LTL 1.8 billion (EUR 521 million) increase, which was due to an increase in the acquisition of debt securities financial assets and a decline in the incurrence of debt securities liabilities to non-residents. In June 2014, the holdings of portfolio investment financial assets abroad boosted by LTL 643 million (EUR 186 million), while the incurrence of liabilities to non-residents contracted by LTL 1.1 billion (EUR 318.6 million). In January-June 2014, net portfolio investment shrank by LTL 828.4 million (EUR 240 million), down from a rise of LTL 2.8 billion (EUR 811 million) in 2013.

 

The positive LTL 0.9 million (EUR 0.3 million) flow of net financial derivatives and employee stock options in June 2014 was due to the decline in the incurrence of liabilities to non-residents outpacing the acquisition of financial assets abroad.

 

In June 2014, the decline in net other investment (with its flow amounting to LTL –2 billion, or EUR –580 million) was driven mainly by a decline in other MFIs' investment abroad, while in May 2014 and June 2013 net other investment rose by LTL 223.2 million (EUR 64.6 million) and LTL 2 billion (EUR 580 million) respectively. Growth in net other investment (LTL 1.2 billion, or EUR 348 million) was also recorded in January-June 2014.

 

In June 2014, the country's official reserve assets posted an increase of LTL 801.7 million (EUR 232 million).






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