VILNIUS - The latest round of statistics shows that all three Baltic states are closing the gap on their foreign trade deficit. Lithuania's dropping by 80.9 percent in the first quarter year on year 's the largest drop of the three countries.
The Lithuanian Department of Statistics announced that the country's exports stood at 9.4 billion litas (2.72 billion euros) in January-March this year, whereas its imports amounted to 10.5 billion litas, equaling decreases of 25.1 and 41.8 percent, respectively, compared to the same period of the last year.
At the end of the quarter, Lithuania's foreign trade deficit stood at 1.1 billion litas 's a fall of 80.9 percent year-on-year.
"The deficit shows that Lithuania has external imbalances quickly unwinding. It means that the need for external financing has decreased, but the adjustment internally has to come from the government," SEB Bankas Senior Economist Nerijus Udrenas told The Baltic Times.
"Given the fact that imports have shrunk, consumption has dropped 's this has also been reflected in retail trade."
Eurostat, the European Union's official statistics agency, reported that retail sales in Lithuania declined in March by 4.3 percent against February and 21.1 percent year on year 's one of the largest decreases in the bloc.
"The income of the government from Value Added Tax (VAT) has decreased and revenues are well behind targets 's business sentiment is low 's the increase of taxation is not an option. The government needs to go through tough changes," Udrenas said.
Mykolas Majauskas, the prime minister's aide for economic matters, told TBT his government would use money from the European Union to supplement the budget where VAT had not succeeded.
"We are trying to utilize the EU funds to substitute these funds where we would use our own resources. This would limit the budget deficit and stabilize the state using the EU funds."
"Consumption is dropping everywhere 's this is reflected in the drop in exports. We are not immune to the factors affecting all the countries. The government has limited tools 's on the other hand, consumption has historically caused us trouble with an overheated economy," Majauskas added.
He said the government is considering all options at the moment, but is unlikely to change the tax regime.
In March the country's exports went up 1 percent and its imports grew 7.7 percent compared to February, signifying elements of stabilization in the economy.
In the first quarter of the year, Lithuania's main export partners were Russia (11.8 percent), Latvia (10 percent), Germany (9.2 percent), and Estonia (6.5 percent). The main import partners were Russia (30.3 percent) and Germany (11.7 percent).
Latvia's trade deficit continued to decrease with exports in March growing for a second consecutive month.
According to the Latvian Central Statistical Bureau's preliminary data, Latvia's exports in March totaled 288 million lats (411 million euros), whereas imports reached 412.6 million lats, resulting in a trade deficit of 124.6 million lats, LETA reported.
In February, Latvia's exports totaled 261 million lats and imports were 385.9 million lats, with a trade deficit that stood at 124.9 million lats.
In March 2008, Latvia exported goods and services worth 375.7 million lats, whereas the volume of imports reached 621.2 million lats, equaling a trade deficit of 245.5 million lats.
In March 2009 the total foreign trade turnover at current prices reached 700.6 million lats 's an 8.3 percent rise on February and less 29.7 percent than in March last year.
In March 2009 exports of goods from Estonia amounted to 8.3 billion kroons (530 million euros) at current prices, while imports to Estonia 10 billion kroons. Compared to March of the previous year, both exports and imports decreased, but increased compared to the previous month, Estonian Statistics announced.
In March, exports from Estonia decreased by 22 percent and imports decreased by 30 percent year-on-year.
The foreign trade deficit amounted to 1.7 billion kroons compared to 3.5 billion kroons the year before. Compared with February, exports grew by 5 percent and imports by 11 percent.