TIRANA, Nov. 2 – Albania’s trade gap continued widening in the first three quarters of this year as exports preserved their downward trend affected by a slump in commodity prices while imports registered a moderate increase, according to INSTAT, the state statistical office.
The country’s trade gap rose by an annual 19 percent to 245 billion lek (€1.8 billion) in the first nine months of this year as exports dropped by 4.65 percent while imports were up by 7.7 percent.
The export/import coverage rate also dropped to 42 percent in the first three quarters of this year, down from 47.4 percent during the same period last year, making Albania more dependent on imports.
Albania’s exports dropped to 177 billion lek (€1.3 billion) in the first nine months of this year negatively affected by a sharp cut in international oil and mineral prices.
“Exports of minerals, fuels and electricity,” within which oil holds the lion’s share, dropped by a sharp 38 percent in January through September 2016 as the country’s major oil producers cut production and froze new drilling to handle the sharp cut in commodity prices.
Oil and minerals had emerged as Albania’s key exports for a few years until mid-2014 when the traditional garment and footwear industry regained its position as the country’s lead exporting industry following the sharp cut in commodity prices.
The garment and footwear industry, locally known as faà§on, led Albania’s exports this year with an annual 20 percent hike to 80.3 billion lek (€588 mln), compensating for the sharp contraction in commodity-related exports.
Exports of construction materials and metals, the country’s third most important exports, also suffered a sharp 20 percent decline in the first three quarters of this year as Turkey’s Kurum, the country’s largest steelmaker, is struggling to escape bankruptcy through loan restructuring.
Meanwhile, Albania’s imports rose by 7.7 percent to 422.6 billion lek (€3.1 billion) in the first three quarters of this year with imports of machinery, equipment and spare parts, the country’s major imports, playing a major role. Imports of this group, also an indicator of private investments in the country, rose by an annual 17 percent to 94 billion lek (€686 mln) in January-September 2016.
Albania’s trade exchanges with key trading partners Italy, Greece and China recovered in the first seven months of this year, but suffered a setback with Kosovo and Turkey where the country’s exports faced a sharp cut, according to state statistical institute, INSTAT.
The poor diversification of Albania’s exports heavily relying on oil and base metals whose prices are currently at a record low is expected to have another negative impact on the country’s exports which dropped by 5 percent in 2015, returning to negative growth rates after a contraction in 2009 soon after the onset of the global financial crisis.
Albania poorly diversified and low value-added exports could face headwinds over the medium term due to oil price shocks and tougher competition in the key garment and footwear from new Asian frontier markets, warns the IMF in a recent country report.
Albania is a net importer with exports covering only about half of imports.
