TIRANA, Nov. 30 – Albania’s exports extended their decline to 4.3 percent in the first ten months of this year on a sharp drop in international oil and base metal prices which is having negative effects on the country’s economy with lower production affecting both employment and government revenue.
Data published by the country’s state statistical institute, INSTAT, shows Albania’s exports in the first ten months of this year dropped to 215 billion lek (€1.55 billion), down 4.3 percent compared to the same period last year, on a sharp cut in exports of “minerals, fuel and electricity” and a slowdown in “garment and footwear” products, Albania’s top exports which account for two-thirds of total exports.
The sharp cut in international oil and base metal prices has affected the activity of some of the key operators in Albania which is one of Europe’s top ten oil producers.
Canada-based Bankers Petroleum, the country’s biggest oil producer, has slightly cut production while U.S.-based TransAtlantic Petroleum has put its loss-making Albanian unit up for sale only one year after acquiring it from Canada-based Stream Oil & Gas due to the sharp cut in international oil prices. A Turkish-Chinese consortium operating a copper plant in the northern Albanian district of Puka has also announced the suspension of its activity for one year, leaving hundreds of workers jobless.
The garment and footwear industry, the country’s top exporter, saw its exports increase by only 3 percent to 74.7 billion lek (€539 mln) in the first ten months of this year, leading Albania’s exports. The industry, which employs about 100,000 people being one of the country’s top employers, has requested a package of incentives to handle hikes in taxes and electricity prices in order to preserve its competitiveness relying in cheap labor costs.
Meanwhile, Albania’s imports also dropped by 2 percent to 442 billion lek (€3.2 billion) year-on-year on a sharp drop in “minerals, fuel and electricity” imports mainly due to lower electricity imports because of a reform in the country’s hydro-dependent state-run electricity system which has cut grid losses and collected accumulated unpaid bills.
Imports of “machinery, equipment and spare parts,” also an indicator of private investments, grew by 9 percent to 92 billion lek (€664 mln) in the first 10 months of this year, registering the country’s top imports.
Albania’s exports are estimated to have also negatively been affected even by the recent depreciation of the euro against the Albanian national currency as exports to Eurozone countries account for more than two-thirds of the country’s total. The euro traded at an average of 138.18 lek in Nov. 2015, down 1 percent compared to the previous months, hitting a three-year low against the Albanian national currency.
In addition to Albania’s poor diversification of exports, a moderate recover in Italy and a new recession in Greece, Albania’s top trading partners, is expected to further affect Albania’s exports in the next couple of year.
Albania is a net importer with exports covering only about half of the country’s total imports.
