Bank of Albania data show manufacturing held the largest share of FDI stock in 2012 with around 892 million euros followed by the extractive industry with 810 million euros.
TIRANA, May 19 – The manufacturing and extractive industries have attracted around half of the FDI stock in Albania during the country’s past two decades of transition into a market economy after the collapse of communist regime and its planned economy.
Bank of Albania data show manufacturing held the largest share of FDI stock in 2012 with around 892 million euros, down from 952 million euros in 2011 with the biggest investments in the production of non-metallic mineral products (construction materials).
The extractive industry increased its FDI stock to 810 million euros in 2012, up from 612 million euros in 2011 and only 311 million euros in 2010 thanks to huge investments in mining of oil, gas and metal ores.
Third ranks monetary and financial intermediation with euro 749 million, followed by transport, storage and communication with 402 million euros.
FDI in the long ailing construction sector rose to 80 million euros in 2012, up from 11 million euros in 2011 and 196 million euros just before the outbreak of the global financial crisis.
The agriculture sector which accounts for 20 percent of the GDP and employs almost half of the country’s population is one of the least attractive sectors for foreign investments with total FDI stock of Euro 2 million at the end of 2012, down from 19 million euros in 2008.
Boosted by investments in hydropower plants and privatization revenue, foreign direct investment registered a record high for the past decade in 2013. Central bank data show FDI in Albania rose to a historic high of 923 million euros in 2013, up from 666 million euros in 2012 and a previous record of 793 million euros in 2010.
Since the outbreak of the global financial crisis, FDI has been constantly growing from Euro 665 million in 2008 to Euro 923 million 2013.
The growth rate in times of crisis is related to several privatizations and concessions especially in the energy sector. The application of a 10 percent flat tax regime in force from 2008 to 2013 has also helped attract foreign direct investment.
Experts and representatives of business associations have warned Albania’s shift to progressive taxation and a 15 percent corporate income tax since January 2014 will have negative impacts on the attraction of FDI and the country’s competitiveness considering that regional countries apply flat tax regimes of 10 percent. However, government is confident the reduction of bureaucracy and corruption will help increase the confidence of foreign investors.
Revised data published by the Bank of Albania show total FDI stock rose to 3.5 billion euros at the end of 2012, up from 3.4 billion euros in 2011 and 2.4 billion euros in 2010.
Since 2007, the FDI stock in Albania has almost doubled, climbing from 1.8 billion euros to 3.5 billion euros.
Canada, Switzerland, Austria, Greece and Italy are the biggest foreign investors in Albania.
