In the first six months of this year, imports of machinery and equipment shrank by 11.5 percent to 41.6 billion lek (Euro 292 million) unveiling sluggish investments by the business community
TIRANA, July 24 – A sharp increase in ‘electricity, fuels and mineral’ and a recovery in the ‘garment and footwear’ exports kept Albanian exports growing by double-digits in the first half of this year when public finances suffered a blow due to soaring pre-electoral spending. Data published by the country’s Institute of Statistics this week show Albanian exports grew by 17.3 percent in the first half of this year, remaining the key driver of Albania’s sluggish growth. Meanwhile, imports continued their downward trend unveiling consumers’ saving trend in a net import country such as Albania. In the first half of this year, imports declined by 6.3 percent driven by a sharp decrease in ‘minerals, fuels and electricity’ imports.
Electricity exports by KESH Power Corporation and fuel exports by Canadian-based Bankers Petroleum are the key contributors to exports during the first half of this year. Albania’s Power Corporation KESH exported around 30 million euros of electricity during the first half of 2013 following heavy rains improving the hydro-situation in the country’s northern Drin cascade where the three biggest HPPs are situated. Meanwhile, Bankers Petroleum which operates the Patos Marinza heavy oil field reported an increase of 26 percent in oil sales the first six months of 2013 year-on-year.
Electricity is expected to have a lower contribution in the second half of 2013 as KESH has already suspended exports to handle the country’s domestic needs in the drought period.
Exports of “minerals, fuels and electricity” rose by a record 44.6 percent to around 48.7 billion lek (Euro 341 million) in the first half of this year ranking the top Albanian exports. Meanwhile, exports of garment and footwear products, the traditional top Albanian exports until 2011, continue suffering crisis impacts from crisis-hit EU partners and difficulty in entering new markets. Garment and footwear exports, whose overwhelming majority of more than 80 percent has Italy as its destination, grew by 8 percent to around 34 billion lek (Euro 237 million) in the first six months of this year, overcoming the slight decline in 2012.
Exports of construction materials and metals were at around 17 billion lek, down 10 percent compared to the first half of 2012.
While Albania’s exports continue preserving a double digit increase, the moderate decrease in imports has positively contributed to the narrowing of the trade deficit. At 233 billion lek, Albanian imports during the first half of 2013 were 6.3 percent lower compared to the same period in 2012, mainly due to lower fuels and electricity imports.
The declining imports of machinery, equipment and spare parts show Albanian businesses are investing less in 2013 affected by sluggish consumption and a saving trend by consumers despite government having lifted VAT for their imports. In the first six months of this year, imports of machinery and equipment shrank by 11.5 percent to 41.6 billion lek (Euro 292 million).
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.
Neighboring Kosovo ranks the third top destination with around 8 billion lek in the first six months of 2013, up 12.6 percent compared to the same period in 2012.
