TIRANA, June 22 – Albania registered a slight decline in foreign direct investment in 2015 but continued remaining the second largest FDI recipient among five EU aspirant SEE economies for the sixth year in a row, according to a report by UNCTAD, the United Nations body responsible for international trade.
At $1 billion in 2015, Albania registered a 10 percent decline in FDI inflows compared to 2014, but was the second largest recipient after Serbia which led FDI attraction with $2.3 billion in 2015. Albania’s FDI hit a historic high of $1.26 billion in 2013 just before the slump in oil and mineral prices in mid-2014 severely affecting the country’s key oil and mining industries.
FDI inflows in Macedonia, Bosnia and Herzegovina and Montenegro ranged from $174 million to $699 million in 2015.
“In South-East Europe, the rise of FDI flows was mainly driven by European investors, although the presence of investors from the South is growing. FDI flows rose in Serbia and Montenegro, while those to Albania remained above $1 billion. In Macedonia, FDI flows declined,” said the report.
“While eurozone countries such as Austria, the Netherlands, Greece and Italy remained the major investors , investors from developing countries such as the United Arab Emirates and China are increasingly active,” it added.
UNCTAD says the EU integration process and increasing regional cooperation will likely support FDI inflows in South-East Europe in the coming years.
Meanwhile, Albania’s FDI outflows slightly rose to $38 million in 2015, up from $33 million in 2014 and a peak level of $40 million in 2013 when Czech company CEZ left the Albanian electricity distribution operator.
While Albania is consolidating its position as the second largest FDI recipient among regional EU aspirants, its FDI stock of $4.8 billion at the end of 2015, was the third highest after Serbia’s $28.8 billion and Bosnia and Herzegovina’s $6.7 billion. The 2015 FDI stock in neighboring Montenegro and Macedonia was at $4.3 billion and $4.5 billion respectively.
Foreign direct investment registered a sharp double-digit decline in the year’s first quarter negatively affected by record-low international oil and mineral prices paralyzing investments in one of the country’s top exporting industries.
Central bank data shows FDI dropped by an annual 42 percent to €158 million in the first quarter of the year, mainly affected by a sharp cut in oil investments as international oil prices fell to a 12-year low of $30 a barrel. Prospects for the remainder of the year appear more optimistic as oil prices have currently recovered to $50 a barrel and two major FDI projects such as the Trans Adriatic Pipeline bringing Caspian gas to Europe and the Devoll hydropower plant by Norway’s Statkraft are progressing.
The telecommunication, manufacturing and extractive industries have attracted around half of the FDI stock in Albania during the country’s past two decades of transition into a market economy after the collapse of communist regime and its planned economy.
Greece, Canada, Switzerland, Austria, and Italy are the biggest foreign investors in Albania. China is about to emerge as a top foreign investor after preliminary deals by Chinese companies to acquire Bankers Petroleum oil company and the country’s sole international airport earlier this year.
