TIRANA, April 5 – Albania’s current account gap slightly narrowed in 2015 as foreign direct investment, travel income and migrant remittances slightly recovered despite a drop in exports fuelled by lower commodity prices.
Central bank data shows the gap in the in the current account, an important indicator about the economy’s health measuring the difference between a country’s savings and investments, slightly dropped to €1.1 billion in 2015, down from €1.28 billion in 2014 and about €1 billion in 2013 affected by a slowdown in exports and foreign direct investment.
Travel income slightly rose to a historic high of €1.35 billion in 2015 when Albania was visited by 4.1 million foreign tourists. The increase in income by 5.3 percent is disproportionate to a 14 percent rise in the number of tourists reported by the country’s state statistical institute, indicating that either tourists are spending less or the data on foreign tourists is inaccurate.
Meanwhile, Albanians continued cutting their spending on trips abroad as the economy struggles to recover and a record 66,000 people sought asylum in EU countries last year.
Central bank data shows Albanians spent about €1.1 billion in trips abroad in 2015, €78 million less than in 2014 and even less than in 2009 ahead of being granted visa free travel in late 2010.
Migrant remittances, mainly coming from 1 million migrants in Greece and Italy, registered a slight recovery in 2015 when they rose to €598 million, up only €6 million compared to 2014 apparently affected by the escalation of the crisis in neighboring Greece and restrictions imposed on banking transactions.
Migrant remittances slightly recovered to €592 million in 2014, up from €545 million in 2013, but remained almost 40 percent below their peak level of €952 mln in 2007 just before the onset of the global financial crisis, according to revised data published by the country’s central bank.
The sharp cut in remittances, one of the main sources of revenues for thousands of households, has considerably affected domestic consumption and the construction sector which has been paralyzed facing lack of demand and a stock of unsold apartments following a pre-crisis boom.
Foreign companies operating in Albania continued transferring large amounts of profits from Albania rather than reinvesting them.
Bank of Albania data shows foreign companies transferred some €238 million in profits in 2015, up from €214 million in 2014. Since the onset of the global financial crisis, foreign companies operating in Albania have considerably increased the transfer of profits to their parent companies. The transfer of profits dropped to €78 million in 2013, down from €232 million in 2012 and 2011, €365 million in 2010 and a record €401 million in 2009 at the onset of the global financial crisis.
