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Republic of Lithuania: Staff Report for the 2013 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund
Published Date:
March 2013
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Fund Relations

(As of January 31, 2013)

Membership Status: Joined: April 29, 1992; Article VIII

General Resources Account:

SDR MillionPercent of Quota
Quota183.90100.00
Fund holdings of currency (Exchange Rate)183.8899.99
Reserve Tranche Position0.030.02

SDR Department:

SDR MillionPercent of Allocation
Net cumulative allocation137.24100.00
Holdings137.31100.05

Outstanding Purchases and Loans: None

Latest Financial Arrangements:

Date ofExpirationAmount ApprovedAmount Drawn
TypeArrangementDate(SDR Million)(SDR Million)
Stand-ByAug 30, 2001Mar 29, 200386.520.00
Stand-ByMar 08, 2000Jun 07, 200161.800.00
Stand-ByOct 24, 1994Oct 23, 1997134.55134.55

Projected Payments to Fund:

(SDR Million; based on existing use of resources and present holdings of SDRs):

Forthcoming
20122013201420152016
Principal0.000.000.000.000.00
Charges/Interest0.000.000.000.000.00
Total0.000.000.000.000.00

Implementation of HIPC Initiative: Not applicable

Implementation of MDRI Assistance: Not applicable

Implementation of Post-Catastrophe Debt Relief (PCDR): Not applicable

Exchange Rate Arrangement:

The currency of Lithuania is the litas. From April 1, 1994 to February 1, 2002, the litas was pegged to the U.S. dollar at LTL 4 per U.S. dollar under a currency board arrangement. Since February 2, 2002 the litas has been pegged to the euro at LTL 3.4528 per euro. Lithuania joined the European Union (EU) on May 1, 2004, and ERM II on June 28, 2004. Lithuania has accepted the obligations of Article VIII of the Fund’s Articles of Agreement and maintains an exchange system free of restrictions on the making of payment and transfers for current international transactions except for those maintained solely for the preservation of national or international security and which have been notified to the Fund pursuant to Executive Board Decision No. 144-(52/51).

Previous Article IV Consultation:

Lithuania is on the 12-month consultation cycle. The last Article IV consultation was concluded on November 16, 2011. The Executive Board assessment is available at http://www.imf.org/external/np/sec/pn/2011/pn11141.htm and the staff report and other mission documents at http://www.imf.org/external/pubs/cat/longres.aspx?sk=25365.0

Safeguards Assessment:

Under the Fund’s safeguards assessment policy, the Bank of Lithuania (BOL) was subject to and completed a safeguards assessment with respect to the Stand-By Arrangement, (the SBA was approved on August 30, 2001 and expired on March 29, 2003) on December 10, 2001. The assessment identified certain weaknesses and proposed appropriate recommendations as reported in EBS/01/211. The BOL has implemented these recommendations.

FSAP Participation and ROSCs:

An FSAP Update mission was completed on November 19, 2007. Fiscal and statistics ROSCs were completed in November 2002 and December 2002, respectively.

Technical Assistance: Technical Assistance (Date):

Lithuania: Technical Assistance from the Fund, 1999–2011
DepartmentIssueActionDateCounterpart
STABalance of payments statistics (also covering Latvia)Mr. BuxtonResident Advisor, October 1999– October 2000Bank of Lithuania
LEGBankruptcy legislationMr. DimitrachkovMarch 2000Ministry of Economy
FADEstablishment of Fiscal Reserve FundMissionJuly 2000State Privatization Fund
MAEMulti-topicMissionMarch 2001Bank of Lithuania
FADTax policy issuesMissionJune 13-26, 2001Ministry of Finance
STAROSCMissionMay 8-22, 2002Department of Statistics, Ministry of Finance, and Bank of Lithuania
FADROSCMissionJuly 10-23, 2002Ministry of Finance
FADTreasury OperationsMr. RamachandranNov 22-Dec 5 2004Ministry of Finance
FADDecentralizationMissionDec 3-Dec 15 2004Ministry of Finance
STAExternal debt statisticsMissionAug 2-4, 2006Bank of Lithuania
MCMStress testingMr. Miguel A. Segoviano BasurtoJune 11-21, 2007Bank of Lithuania
STAExternal debt statisticsMissionNovember 8-19, 2007Bank of Lithuania
FADPublic expenditure reviewWB mission / Ms. Budina (FAD) participationApril 14-24, 2009Ministry of Finance
FADTax AdministrationMissionAug 26–Sept. 8, 2009Ministry of Finance
MCM/LEGBank Resolution/Banking LawMissionSept. 28–Oct. 6, 2009Bank of Lithuania/Ministry of Finance
FADReform of Social Security and Health FundsMissionApril 6-20, 2010Ministry of Finance/State Social Insurance Fund Board
LEGPersonal Bankruptcy ReformMissionApril 30–May8, 2010Ministry of Economy
FADTax AdministrationMissionJuly 14-27, 2010Ministry of Finance
FADGeneral Tax PolicyMissionOctober 19-25, 2010Ministry of Finance
STAGFS 2001 StatisticsMissionFebruary 11-22, 2013Ministry of Finance

Resident Representative: Mark Allen (stationed in Warsaw, Poland).

Anti-Money Laundering and Combating Financing of Terrorism: Lithuania’s compliance with the international AML/CFT standard, the Financial Action Task Force’s (FATF) 40+9 Recommendations, was assessed by MONEYVAL, the FATF-style regional body of which it is a member, in January 2006. The assessment report indicated several deficiencies and the authorities have taken steps to address them. A new assessment by MONEYVAL is expected to be published in early 2013.

Statistical Issues

General: Over the past several years, Lithuania has made good progress in establishing a macroeconomic database. Official data for all sectors are adequate for surveillance purposes. Lithuania subscribed to the Special Data Dissemination Standard (SDDS) in May 1996, and its metadata have been posted on the Fund’s Dissemination Standards Bulletin Board (DSBB) since April 1997. Lithuania meets the SDDS specifications for coverage, periodicity and timeliness of the data, and for the dissemination of the advance release calendars. A significant amount of economic and financial information is now available on various websites through the Internet (see section on Dissemination of Statistics, below). A ROSC data module was published in November 2002.

National Accounts: The national accounts are compiled by Statistics Lithuania (SL) (the former Department of Statistics) in accordance with the guidelines of the European System of Accounts 1995 (ESA 95). Quarterly GDP estimates at current and at constant prices are compiled using both the production and expenditure approaches. GDP estimates by production are considered to be more reliable than the corresponding estimates by expenditure, but no statistical discrepancies between these two estimates are shown separately in the published figures as the discrepancies are included in the estimates of changes in inventories. The annual and the quarterly national accounts are compiled at previous year prices and chain-linked to 2000. In general, good data sources and sound methods are used for the compilation of the national accounts, but measuring activity during the volatile environment of the 2008/09 crisis proved challenging. Moreover, difficulties remain in measuring the economic activity of the informal sector. These estimates are compiled at detailed levels of economic activity using fixed coefficients derived from a benchmark surveys conducted in 1996 and 2003, and updated in 2006, and in 2011. According to the most recent updates, the informal sector was estimated to be 13 percent of GDP in 2008.

Price Statistics: Since December 1998, CPI weights have been updated annually. The monthly CPI is available in the second week following the reference month. The producer price index is calculated according to the chain-linked Laspeyres formula with weights updated every year.

Government Finance Statistics: Data on the central government budget execution are available at a monthly and quarterly frequency, although these data are subject to frequent revisions. The ongoing treasury project is expected to improve fiscal data quality substantially. However, further work is needed to clarify the treatment of public health care providers and of EU transactions, and the consolidation procedure for government operations. A new classification, incorporating the GFSM2001 was approved in mid-2003. Since then, the MoF has been reporting to STA general government’s annual data on an accrual and cash basis (except for local governments, which are still on a cash basis) for publication in the Government Finance Statistics Yearbook (GFSY). In addition, the MoF has been reporting quarterly and monthly data in the GFSM 2001 format for publication in the IFS.

Monetary Statistics: The Bank of Lithuania (BoL) reports monetary and financial statistics (MFS) to STA on a timely and regular basis. The scope, concepts and definitions of the MFS are broadly in line with the guidelines of the Monetary and Financial Statistics Manual (MFSM). Following Lithuania’s accession to the European Union, the BoL implemented the ECB framework for compiling and reporting monetary data reflecting the ECB regulations and ESA 95 on sectorization, valuation and classification of financial instruments.

Balance of Payments: The BoL is responsible for compiling balance of payments, international investment position (IIP), external debt and international reserves statistics. The BoL reports quarterly data on balance of payments, IIP and monthly international reserves to STA on a timely and regular basis. Balance of payments data (on a monthly and quarterly basis) are compiled using the format recommended in the Balance of Payments Manual, fifth edition (BPM5). The monthly data correspond to several key balance of payments components, compiled on the basis of a sample survey covering the public sector, commercial banks, and some nonfinancial private sector institutions. The Data Template on International Reserves and Foreign Currency Liquidity is disseminated monthly according to the operational guidelines and is hyperlinked to the Fund’s DSBB. Since late 2004, the BoL disseminates quarterly external debt data in the World Bank’s Quarterly External Debt Statistics (QEDS) database.

Data Standards and Quality: The authorities publish a range of economic statistics through a number of publications, including the SL’s monthly publication, Economic and Social Developments, and the BoL’s monthly Bulletin. A significant amount of data are available on the Internet:

  • metadata for data categories defined by the Special Data Dissemination Standard are posted on the IMF’s DSBB (http://dsbb.imf.org);

  • the BoL website (http://www.lb.lt/statistical_data_tree) provides data on monetary statistics, treasury bill auction results, balance of payments, IIP, external debt and other main economic indicators;

  • the SL website (http://www.stat.gov.lt/lt/) provides monthly and quarterly information on economic and social development indicators;

  • the MoF (http://www.finmin.lt) home page includes data on the national budget, as well as information on laws and privatization; and government finance statistics (deficit, debt).

  • NASDAQ OMX Baltic website (http://www.nasdaqomxbaltic.com/market/?lang=en) includes information on stock trading at NASDAQ OMX Baltic stock Exchange in Vilnius (the former Vilnius Stock Exchange)

Republic of Lithuania: Table of Common Indicators Required for SurveillanceAs of February 26, 2013
Date of Latest ObservationDate ReceivedFrequency of Data7Frequency of Reporting7Frequency of Publication7Memo Items:
      Data Quality – Methodological soundness8Data Quality – Accuracy and reliability9
Exchange RatesFebruary 25, 2013February 25, 2013DDD
International Reserve Assets and Reserve Liabilities of the Monetary Authorities1January 2013February 7, 2013MMM
Reserve/Base MoneyJanuary 2013February 14, 2013MMMO, LO, LO, LOO, O, LO, O, O
Broad MoneyJanuary 2013February 14, 2013MMM
Central Bank Balance SheetJanuary 2013February 14, 2013MMM
Consolidated Balance Sheet of the Banking SystemDecember 2012January 29, 2013MMM
Interest Rates2January 2013February 25, 2013MMM
Consumer Price IndexJanuary 2013February 18, 2013MMMO, O, O, OO, O, O, O, O
Revenue, Expenditure, Balance and Composition of Financing3 – General Government4Q3/2012December 27, 2012QQQLO, LO, LO, OO, O, O, O, O
Revenue, Expenditure, Balance and Composition of Financing3– Central GovernmentDecember 2012January 28, 2013MMM
Stocks of Central Government and Central Government-Guaranteed Debt5December 2012January 28, 2013MMM
External Current Account BalanceQ3/2013December 27, 2012QQQO, O, LO, OO, O, O, O, O
Exports and Imports of Goods and ServicesDecember 2012February 12, 2013MMM
GDP/GNPQ3/2012November 29, 2012QQQO, LO, O, LOO, LO, LO, LO, O
Gross External DebtQ3/2012December 20, 2012QQQ
International Investment Position6Q3/2012December 20, 2012QQQ

Any reserve assets that are pledged of otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means

Both market-based and officially-determined, including deposit and lending rates, discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability position vis-à-vis nonresidents.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Not Available (NA).

Reflects the assessment provided in the data ROSC published in July 2004, the findings of the mission that took place during September 2003 for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).

Same as footnote 8, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment and validation of intermediate data and statistical outputs, and revision studies.

Any reserve assets that are pledged of otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means

Both market-based and officially-determined, including deposit and lending rates, discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability position vis-à-vis nonresidents.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Not Available (NA).

Reflects the assessment provided in the data ROSC published in July 2004, the findings of the mission that took place during September 2003 for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).

Same as footnote 8, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment and validation of intermediate data and statistical outputs, and revision studies.

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