Current Account deficit widens by 25% in Q1

TIRANA, June 11–Albania’s current account deficit rose by 25.03% on the year to 334.2 million euro in the first quarter of 2009, the Bank of Albania declared on Thursday.
The widening trade deficit, as well as the swelling deficit on services and the negative net income were the main reasons for the deepening of the current account gap, the bank said in a statement.
Exports in the first three months of the year fell by 15% to 176 million euro. The pace of the drop was more than double than that of imports which declined by only 6.0% year-on-year to 692 million euro. Exports covered 25% of imports, down from 28% in the same period a year earlier, the statement said.
Both exports and imports of services were dominated by tourism. Albanians spent abroad some 220 million euro, up 4.0% on the year, while foreign visitors spent 212 million euro in Albania through March, down 4.0% on the year, the bank said.
Albania paid 7.2 million euro in interest on its foreign debt, which rose by 150 million euro over the three-month period.
Transfers, mainly remittances from Albanian immigrants, dropped by 10% or 29.5 million euros in the first quarter of 2009 for a total of 213.4 million euros. The continuing trend of decreasing remittances, which usually are the only source of income for some, may return many Albanian families below the poverty level.
Overall, the current account volume decreased by 7% which signals a general downturn in the country.
Albania’s current account gap in 2008 was close to 1.3 billion euro, equivalent to 14.9% of the country’s gross domestic product (GDP), versus 831 million euro deficit, or 10.4% of GDP, in 2007.
Albania’s economy grew by a real 7.2% last year, even though different institutions have given different estimations, faster than the 6.1% growth target and the 6.0% rise recorded in 2007. The government has projected nominal GDP growth of 6.3% to 1.18 trillion Lek (9.0 billion euros) this year.