Exports slow down, imports keep shrinking

TIRANA, Sept. 24 – Albania’s exports continue preserving the double-digit increase despite the suspension of electricity imports in mid-2013. INSTAT data show exports slightly slowed down to 16.6 percent in the first eight months of this year down from 18.3 percent in the first seven months of the year. Meanwhile, imports continue their downward trend unveiling the poor consumption in a net import country such as Albania but positively contributing to the narrowing of the trade deficit. In the first eight months of this year, imports dropped by 5.3 percent fuelled by a sharp drop in ‘minerals, fuels and electricity’ imports.
A sharp increase in ‘electricity, fuels and minerals’ and a recovery in the ‘garment and footwear’ exports kept Albanian exports growing by double-digits in the first eight months of this year when public finances suffered a blow due to soaring pre-electoral spending. Data published by the country’s Institute of Statistics show Albanian exports grew by 16.6 percent to 160 billion lek (Euro 1.1 billion) in the first eight months of this year, remaining the key driver of Albania’s sluggish growth. Electricity exports by KESH Power Corporation and fuel exports by Canadian-based Bankers Petroleum were the key contributors to exports during the first half of this 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 40 percent to around 67 billion lek in the first eight months of this year ranking the top Albanian exports. Meanwhile, exports of garment and footwear products, the traditional top Albanian exports until 2011, seem to have overcome the crisis impacts from EU partners despite difficulty in entering new markets. Garment and footwear exports, whose overwhelming majority of more than 80 percent has Italy as its destination, grew by 11 percent to around 45.6 billion lek in the first eight months of this year, overcoming the slight decline in 2012.
Exports of construction materials and metals dropped to around 21.7 billion lek, down 17 percent compared to the first eight months 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 324 billion lek, Albanian imports during the first eight months of 2013 were 5 percent lower compared to the same period in 2012, mainly due to lower fuels and electricity imports. Imports of food beverages and tobacco also dropped by 1.3 percent.
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 eight months of this year, imports of machinery and equipment shrank by 11.7 percent to 57.3 billion lek (Euro 398 million).
Data show crisis hit Italy and Greece continue remaining Albania’s top trade partners. In the first eight months of 2013, Italy accounted for around half of Albanian exports and one-third 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 11 billion lek in the first eight months of 2013, up only 3.7 percent compared to the same period in 2012. Trade disputes last August which escalated with protests over unaffordable parking tariffs set by private customs terminal in Kosovo also influenced.