A sharp 40 percent decline in exports of “minerals, fuel and electricity” the country’s lead exports in the past three years, was the main cause for the poor performance of Albania’s exports for the second month in a row this year
TIRANA, March 30 – Albania’s exports suffered another blow last February affected by a sharp drop in international oil and base metal prices and massive floods hitting southern Albania.
Data published by the country’s state statistical institute, INSTAT, shows Albania’s exports dropped by 6.8 percent to 35.5 billion lek (Euro 248 million) in the first two months of this year compared to the same period in 2014.
A sharp 40 percent decline in exports of “minerals, fuel and electricity” the country’s lead exports in the past three years, was the main cause for the poor performance of Albania’s exports for the second month in a row this year.
With international oil prices standing below $60 per barrel, almost half of their peak June 2014 level, Albania’s oil companies have considerably cut production to handle negative impacts. Citing a sharp drop in international oil prices, Canada-based Bankers Petroleum, which operates the Patos-Marinza heavy oilfield in south-western Albania and is the country’s biggest foreign investor and exporter, has reduced its 2015 capital program to US$ 153 million, down from a previously announced capital program of $218 million in early December 2014.
Exports of garment and footwear products, the country’s traditional top exports in the past two decades, also suffered in the first couple of months of this year. Exports of this industry which employs around 100,000 people and is one of the country’s top employers especially for low-skilled workers who are paid minimum monthly wages of around 22,000 lek (Euro 154), grew by only 4 percent to 14.5 billion lek (Euro 101 million) year-on-year in the first two months of this year, leading the country’s exports.
Meanwhile, imports suffered a negligible 0.2 percent decline affected by lower electricity exports due to the country’s favourable situation of hydro-dependent electricity generation.
Imports of “machinery, equipment and spare parts,” an indicator of private investments, grew by 12 percent to 15.1 billion lek (Euro 105 million) year-on-year in the first two months of this year, leading the country’s imports.
Albania’s trade gap also slightly widened to 38.4 billion lek (Euro 276.8 million) with the export/import coverage rate dropping to 48.2 percent, down from 51.5 percent in the first two months of 2014.
A significant drop in international oil and base metal prices is expected to have a negative impact on Albania’s exports which in 2014 registered their lowest growth rate since the onset of the global crisis in 2009.
Experts say the situation is a result of the poor diversification of Albanian exports which mainly rely on energy and garment and footwear products, accounting for 70 percent of total exports.
“Exports will continue having a relatively poor performance even in 2015, but Albania could reduce the negative impacts by focusing more on tourism and attracting foreign direct investments which could stimulate exports,” says Ilir Ciko, an economy expert.
Albania’s exports suffered a setback in 2014 registering their lowest level since the onset of the global crisis in 2009 affected by poor electricity and oil exports. Data published by state statistical institute, INSTAT, show exports grew by only 3.75 percent in 2014, while imports were up by 6.7 percent, further widening the trade gap in a net importer such as Albania.
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.
