Consumption, investments recover

TIRANA, Oct. 30 – Both domestic consumption and private investments, the two key drivers of Albania’s growth registered a boost in the first three quarters of this year, unveiling positive signals of a recovery of the Albanian economy in the second half of the year.
The value added tax, which indirectly measures domestic consumption and is levied at a fixed 20 percent rate on almost every product and service, rose by 16.2 percent in the first three quarters of this year, according to the Finance Ministry.
Meanwhile, data published by INSTAT show imports of machinery, equipment and spare parts, an indicator measuring private investments were up by 9.5 percent to around 70 billion lek (Euro 500 million) leading the list of Albanian imports.
However, exports continued slowing down even in September 2014, while imports considerably recovered, negatively affecting the trade balance in a net importer such as Albania.
Data shows Albania’s exports slowed down to 6 percent in the first three quarters of this year compared to the same period last year, affected by a sharp cut in electricity exports due to the severe drought affecting the country’s wholly hydro-dependent electricity system.
Meanwhile, imports continue their growing trend unveiling a recovery in domestic consumption, but further widening the trade gap at a time when exports have slowed down to moderate single-digit growth rate.
INSTAT data shows imports grew by around 8.4 percent in the first nine months of this year, boosted by recovery in imports of industrial products.
Albania’s trade gap in the first three quarters of this year rose by around 10 percent to 205 billion lek (Euro 1.44 billion), according to INSTAT data. Meanwhile, the export/import coverage ratio dropped to 48.6 percent, down from 49.5 percent in the first three quarters of 2013.