Albania’s top trade partners Italy and Greece although slightly recovering remained in recession
TIRANA, Aug. 14 – The Eurozone and the EU 27 escaping a crippling 18-month recession is good news even for Albania which conducts the overwhelming majority of around 70 percent of its trade exchanges with EU countries. The EU statistical office, Eurostat, reported this week GDP rose by 0.3 percent in both the euro area (EA17) and the EU27 during the second quarter of 2013, compared with the previous quarter. However. behind the headlines gains, compared with the same quarter of the previous year, seasonally adjusted GDP fell by 0.7 percent in the euro area and by 0.2 percent in the EU27 in the second quarter of 2013, after shrinking by 1.1 percent and 0.7 percent respectively in the previous quarter.
Albania’s top trade partners Italy and Greece although slightly recovering remained in recession. Data show Italy which is the destination of half of Albania’s exports and around 40 percent of imports shrank by 0.2 percent compared to the first quarter of 2013 and by 2 percent compared to the second quarter of 2012. Meanwhile, the GDP in Greece, declined by 2 percent compared to the second quarter of 2012.
Data show crisis hit Italy and Greece continue remaining Albania’s top trade partners with Italy accounting for around 38.8 percent of trade exchanges in June 2013 and Greece having dropped to 8 percent. In the first half of 2013, Italy accounted for around 50 percent of Albanian exports and 34.5 percent of total imports. Neighbouring Greece which is suffering its sixth consecutive year of recession, now ranks the fifth most important destination of Albanian exports after Spain, Kosovo, China and Germany and the second most important destination only for imports with around 10 percent. Spain has emerged as the second most important destination of Albanian exports mainly due to oil exports by Canadian-based Bankers Petroleum.
The weak performance of key economic partners such as Greece and Italy has exerted its toll on the Albanian economy and on credit availability to businesses, according to a UN annual progress report for 2012. The report highlights the contributions of the United Nations Agencies in Albania to the national priorities in the area of governance and rule of law, economy, environment, regional and local development, and inclusive social policy.
The ongoing recession in Italy and Greece, Albania’s top trade partners and the hosts of more than one million migrant workers sending the overwhelming majority of remittances home, hints the Albanian economy will face another difficult year, experts say. After growing by 1.6 percent in 2012, the lowest rate in the past 15 years, top international financial institutions expect the Albanian economy to grow at the same rates while the Albanian government expects growth to accelerate to 3 percent. Italy, the destination of more than 50 percent of Albanian exports, registered a 2.4 percent shrink in 2012, after positive growth rates in 2010 and 2011 and recession in 2008 and 2009. Meanwhile, Greece, which currently remains Albania’ second most important trade partner only for imports has been in its worst ever recession since 2008.
Both Italy and Greece are expected to face another year of recession in 2013 before returning to positive growth rates in 2014, according to Eurostat forecasts.
The UN report says exposure to the euro-crisis has also caused decline in remittances, which is a vital source of income for many Albanians. “Overall, while Albania maintained a relatively strong position compared to other countries in the region and avoided economic recession, macroeconomic stability felt the negative pressure of the global economic crisis, which is directly affecting the wellbeing of the population.”
