The 20 percent growth in exports was unable to reduce the trade gap which in 2011 rose by 8.7 percent to Euro 2.5 billion, or 26 percent of the country’s GDP
By Ervin Lisaku
TIRANA, Jan. 31 – While domestic consumption and investments remain sluggish, exports were one of the key promoters of Albania’s yet to be seen moderate economic growth in 2011. Bank of Albania data available in Euro show exports continued to positively perform despite the crisis-hit EU member countries, which are the destination of 70 percent of Albania’s exports. Fuelled by ongoing rising demand from Italy, Albanian exports continued registering double-digit growth for the second year in a row after the shrink in the outbreak of the global crisis in 2009. Central bank data show Albania’s exports rose by 19.7 percent to Euro 1.4 billion in 2011, compared to an annual growth rate of 56 percent in 2010 and an 18 percent shrink in 2009. However, the 20 percent growth in exports was unable to reduce the trade gap which in 2011 rose to Euro 2.5 billion, or 26 percent of the country’s GDP. A net-importer, Albania imported Euro 3.9 billion in 2011, up only 8.7 percent compared to 2010, which in real terms is an negligible growth rate taking into account the depreciation of the national currency, lek, against the Euro and the ongoing rise in global food prices.
Despite suffering severe debt crisis and its economy slowing down, Italy continued remaining Albania’s top trade partner accounting for 53 percent of exports and 30 percent of imports, according to INSTAT data. Albania’s major exports to Italy are garment and footwear products, accounting for 50 percent of total exports there.
The situation in the more severely crisis-hit neighbouring Greece, Albania’s second most important trade partner, registered a turning point for exports, but continued their downward trend for imports for the third year in a row. The 2011 BoA data rank Greece as the fourth major destination of Albanian exports and the second major partner for imports.
Detailed INSTAT data show the fashion industry, producing garment and footwear products with imported raw material, continued remaining the top export performer also thanks to Arab spring turmoil and the removal of customs fees.
‘Machinery, equipment and spare parts’ were Albania’s key imports for 2011 registering an annual 24 percent increase, an indicator showing that despite crisis impacts and rising pessimism among businesses investments continued.
While the Albanian government has raised its GDP forecast for 2012 to 4.3, which is twice more compared to what international financial institutions expect, the performance of exports during this year seems more at risk as the Eurozone is expected to plunge into mild recession and Albania’s key trade partners Italy and Greece to continue suffering more severe debt-crisis impacts. The business and consumer confidence also remains at a critical point and expectations for 2012 have become more pessimistic as shown in the latest Bank of Albania survey.
While being the only EU aspirant to achieve positive growth even in the crisis year of 2009, during the first half of 2011 Albania registered the lowest GDP growth, ranking better only compared to Croatia due to join the EU in 2013. Latest data by the country’s state Institute of Statistics, INSTAT, show the Albanian economy grew by 3.4 percent in the first quarter of 2011 and 0.5 percent in the second quarter, accounting for an average of 2 percent. The 2011 first-half performance makes government’s latest review of a 3.9 percent growth impossible to meet as indirect indicators, such as government revenues, consumption, FDI, remittances hint no improvement for the second half of 2011.
Exports in millions of Euro, annual growth in brackets
2011 2010 2009 2008
1,403 (19.7%) 1,172 (56%) 751 (-18%) 917
Imports in millions of Euro, annual growth in brackets
3,905 (8.7%) 3,474 (7%) 3,249 (-9%) 3,570
Trade deficit
-2,502 -2,302 -2,498 -2,653
(Source: Bank of Albania)
Top exports in 2011
1. Textiles and footwear grew by 15% to around 64 billion lek
2. Minerals, fuel, electricity rose by 31% to around 59 billion lek
3. Construction materials and metals also grew by 31% to around 42 billion lek
Top imports in 2011
1. Machinery, equipment, spare parts grew by 24% to 110 billion lek
2. Mineral, fuel, electricity grew by 40% to 102 billion lek
3. Food, beverages, tobacco up by 13.6% to 91 billion lek
Top trade partner for exports
1. Italy (Exports in 2011 up by 28% to 105 bln lek; Share of total exports 53%)
2. Turkey (Exports in 2011 up by 64% to 15 bln lek)
3. Kosovo (Exports in 2011 up by 47% to 14.7 bln lek)
4. Greece (Exports in 2011 up by 16% to 10 bln lek)
Top trade partner for imports
1. Italy (Imports in 2011 up by 26.4% to 166 bln lek; Share of total imports 30%)
2. Greece (Imports in 2011 down by 4% to 58 bln lek; Share of total imports 5%)
(Source: INSTAT)
