The current account surplus continues to drop

In July 2010, the current account surplus in the balance of payments dropped to 38.7 mil. lats. The revenue account balance rose a little over the course of the month, but the total trade balance of goods and services worsened. Though close to balanced, it is still negative.

The worsening of the trade balance compared to June was the result of both the prevalence of goods imports over exports increasing and worse services trade results than in the previous month. It was mostly the value of the cargo transport and financial services granted that decreased while the value of transport services received increased. The balance of the revenue account rose a little over June as the amount of dividends paid decreased and businesses of direct foreign investors continuing to suffer losses.

The current trends of economic development warrant a cautious view of the future development of the current account surplus: its decrease will continue to be determined both by the increasing imports resulting from the need for intermediate goods in manufacturing and the possible rise in the imports of investment goods and consumer goods promoted by a gradual recovery of domestic demand. The rapid rise in exports may moderate however: the resumption of foreign demand which outpaced any rise in domestic activity has a positive effect of exports, yet there is no basis for expecting a rapid rise in exports in the near future.

APA: Paula, D. (2020, 01. dec.). The current account surplus continues to drop. Taken from https://www.macroeconomics.lv/node/2411
MLA: Paula, Daina. "The current account surplus continues to drop" www.macroeconomics.lv. Tīmeklis. 01.12.2020. <https://www.macroeconomics.lv/node/2411>.

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