Garment and footwear products back on top of Albanian exports

TIRANA, March 31 – Garment and footwear are back on top of the Albanian exports list. After losing their top position in 2012 and 2013, garment and footwear products, the traditional top Albanian exports during the past two decades of Albania’s transition, have regained their lead in the first couple of months of 2014, overcoming “minerals, fuels and electricity” which were Albania’s top exports in the past two years.
Data published by the country’s state institute of statistics, INSTAT, show exports of garment and footwear exports locally known as fa谮, grew by 26 percent to around 14 billion lek (Euro 98 million) in the first two months of 2014 compared to the same period a year ago.
Government says it is concluding a package of 42 measures aimed at facilitating the business climate for garment and footwear producers, one of the top private sector employers with around 100,000 people, but has made it clear it will not make an exception on the corporate income tax which starting January 2014 was raised by 5 percent to 15 percent.
The lift of social security and health insurance contributions on new employees for a certain period of time, the lift of VAT on all kind of machinery imports, the removal of customs barriers and abuses during inspections are some the measures government has unveiled for the industry which strongly opposed the increase of corporate tax by 5 percent, fearing that Albania was losing its competitiveness compared to other regional countries which apply the 10 percent flat tax.
Exports of minerals, fuels, and electricity which in 2012 and 2013 were the top Albanian exports thanks to a sharp rise in oil exports by Canadian-based Bankers Petroleum and seasonal electricity exports due to the favourable hydro situation, continued growing even in early 2014 but at a slower pace. INSTAT data show exports of this group grew by only 3 percent to around 13 billion lek (Euro 90 million) in the first two months of 2014.
Meanwhile, exports of construction materials and metals suffered a slight drop in the first two months of 2014 when they fell by 2.5 percent to around 4.9 billion lek (Euro 34 million).
Imports also registered a considerable increase in the first two months of 2014 mainly as a result of higher electricity imports due to the drought period in early 2014.
INSTAT data show total imports rose by 9.5 percent to 74 billion lek in the first two months of 2014 with imports of “minerals, fuels and electricity” topping the list. Imports of machinery, equipment and spare parts, which indirectly measure private sector investments recovered in early 2014 after a downward trend in the past couple of years. INSTAT data shows imports of this group rose by 9 percent to around 9.3 billion lek (Euro 65 million).
The export/import coverage ratio in February 2014 rose to 52 percent, up from 47.6 percent in February 2013 and around 41 percent in February 2013, unveiling the Albanian economy is becoming less dependent on imports.
A double digit growth in exports was the key driver of Albania’s sluggish growth in 2013 at a time when domestic consumption and private investments registered negative growth rates.
Data published by the country’s Institute of Statistics show Albania’s exports grew by 15.6 percent in 2013, registering growth rates for the fourth consecutive year after the shrink in onset of the global crisis in 2009.
While the Albanian economy has considerably slowed down since the outbreak of the global economic crisis in late 2008, the good news is that exports have more than doubled in the past five years and the country has become less dependent on imports. The situation has considerably improved Albania’s trade gap although the slowdown in imports in 2012 and 2013 has been linked to shrink in consumption and investments.
Data published by the country’s state Institute of Statistics show the export/import coverage ratio rose to 48.1 percent in 2013 up from a mere 24.4 percent in 2009 and an average of 24 percent from 2000 to 2008.