TIRANA, July 18 – Albania’s trade gap remained unchanged in the first half of this when both exports and imports dropped by around 2.2 percent each with the export-import coverage at 50 percent.
Data published by the country’s state statistical institute, INSTAT, shows Albania’s trade gap was down by only 0.04 percent to 128.4 billion lek (€901 million) as exports dropped by 2.3 percent and imports were down by 2.2 percent compared to the same period last year.
A double-digit decline in “minerals, fuel and electricity” and a slowdown in exports of garment and footwear products, is having a major impact on Albania’s exports which continued their downward trend for the fifth month in a row.
Albania’s exports dropped by 2.3 percent to 127 billion lek (€891 mln) in the first half of this year affected by a sharp 22 percent decline in “minerals, fuel and electricity” due to lower production of oil fuelled by a sharp cut in international oil prices, according to INSTAT.
Exports of this group dropped to 36.9 billion lek (€259.5 mln) down from around 47 billion lek (Euro 330 mln) a year ago when international oil prices were at their peak level, ranking Albania’s second most important exports.
Garment and footwear products, Albania’s traditional top exports, registered a turning point in the first half of this year when they overcame their downward trend in the first four and five months of this year affected by lower demand from Italy, Albania’s top trading partner and the destination of around 85 percent of these exports.
Garment and footwear exports slightly rose by 0.9 percent to 43.7 billion lek (€307 mln) in the first half of this year, leading Albania’s exports. The positive effects of the package of incentives government approved in early 2014 have almost been exhausted and the industry is now struggling to maintain positive growth rates affected by new tax hikes on dividends and fuel and higher electricity and fuel prices
The lower exports of Albania’s traditional top products were compensated by moderate increases in exports of “food, beverage and tobacco” and “machinery, equipment and spare parts.”
Meanwhile, imports dropped by 2.2 percent to 255.4 billion lek (€1.79 bln) on lower imports of electricity and fuel. Imports of ‘machinery equipment and spare parts,’ an indicator also measuring private investments, grew to around 52.3 billion lek (€367.5 mln) in the first half of this year, up 15 percent compared to the same period last year, leading Albania’s import list.
Exports to top trading partner Italy, the destination of around half of Albanian exports, dropped to 60.7 billion lek (€426.4 mln) in the first six months of this year, down 14 percent compared to the same period last year despite the neighboring country escaping recession in the first quarter of this year.
Exports to neighboring Kosovo, the second most important destination of Albania’s exports registered a sharp 57 increase in the first half of this year when they climbed to around 12 billion lek (€84 mln). Once the country’s second most important destination for exports and imports, crisis hit neighboring Greece now ranks the fifth most important destination of exports and the second source of imports with only a slight advantage over China which is emerging as Albania’s second most important trade partner.
A significant drop in international oil and base metal prices is having 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.
Albania’s exports suffered a setback in 2014 affected by poor electricity and oil exports. INSTAT data shows 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.
