Exports to Italy stagnate, Greece drops to fifth destination

TIRANA, Oct. 24 – After shrinking in the first quarter of 2012, Albanian exports recovered in the second and third quarters but performance remains poor due to falling demand by crisis-hit top trade partners Italy and Greece. Data published by the country’s state statistical institute, INSTAT, show Albanian exports during the first 9 months of this year reached 156.3 billion lek, up 6.7 percent year-on-year.
Albania’s strong trade, investment and remittance ties to Greece and Italy are likely to continue to hold back growth in the coming year, while public debt is close to the statutory limit of 60 per cent of GDP, limiting the room for fiscal manoeuvre, international financial institutions, which expect the Albanian economy to grow between 0.5 to 1 percent have warned.
Exports to top trade partner Italy, the destination of more than half of Albanian exports, have also been affected by the crisis there, with their growth rate sharply slowing down. In the first three quarters of 2012, Albania exported around 79 bln Lek of goods to Italy, up only 3 percent compared to the same period last year.
Meanwhile, exports to Greece, the country’s second most important trade partner, slightly shrank by 1.4 percent ranking Greece only the fifth most important destination for Albanian products.
Greece is the second most important partner for imports with trade exchanges accounting for 12.5 percent of the total.
Spain surprisingly ranks the second most important destination of exports for the first three quarters of 2012 with around 13.6 billion lek followed by Kosovo with 12.8 billion lek. Albanian exports to neighbouring Kosovo have registered a 25 percent increase despite a temporary ban imposed on Albanian cement last July.
The garment and footwear sector, one of the top employers and exporters in the past few years, continues suffering crisis impacts as demand from top EU partners falls. INSTAT data show textile and footwear exports failed to recover, shrinking by 5 percent to 46.7 billion lek for the first nine months of this year. The garment and footwear industry accounts for 32 percent of total exports and employs around 70,000 people.
“Minerals fuel and electricity” now rank the country’s top exports with 55 billion lek, up 29 percent compared to the first nine months of 2011.
As far as imports are concerned Italy tops the list with 120 billion lek, 31 percent of the total, followed by Greece with 34 billion lek, or 10 percent of the total.
Import of machinery and equipment, an indicator measuring private investments, dropped by 5 percent to 72 billion lek during the first 9 months of 2012.
The escalating Eurozone crisis and especially the situation in Greece and Italy, Albania’s top trade partners and hosts to more than 1 million migrants, is expected to further aggravate matters. The IMF expects Italy, the destination of around half of Albanian exports to face recession in 2012 and 2013. Neighbouring Greece whose influence on Albanian trade and investments has been declining is expected to face another year of recession.
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.
While exports have preserved their growth rates, imports are slightly down by 1.2 percent for the first nine months of this year, reconfirming the sluggish domestic consumption in a country which is a net importer.