Imports, which are also an indicator of domestic consumption grew by 10 percent to 116 billion lek (Euro 817 million) in the first quarter of 2014 overcoming the moderate declines in 2012 and 2013 when the Albanian economy grew by 1.2 percent and 0.44 percent respectively.
TIRANA, April 29 – Fuelled by a 10 percent increase in imports, Albania’s trade gap registered a moderate increase in the first quarter of 2014 despite exports continuing their positive performance. Data published by the country’s state statistical institute INSTAT show Albania’s trade deficit grew to around 57 billion lek (Euro 400 million) in the first quarter of 2014, up from 52.4 billion lek (Euro 368 million) during the same period in 2013.
Imports, which suffered negative growth rates of around 3 percent in 2012 and 2013, reflecting sluggish consumption in a net importer country such as Albania and the slowdown of the country’s economy, registered a turning point in early 2014. Imports, which are also an indicator of domestic consumption grew by 10 percent to 116 billion lek (Euro 817 million) in the first quarter of 2014 overcoming the moderate declines in 2012 and 2013 when the Albanian economy grew by 1.2 percent and 0.44 percent respectively.
Meanwhile, exports continued their positive performance fuelled by a double-digit growth in exports of garment and footwear products. INSTAT data shows exports rose by 11 percent to around 60 billion lek (Euro 416 million) year-on-year in the first quarter of 2014.
Garment and footwear exports grew by a sharp 31 percent to 21.5 billion lek year-on-year in the first quarter of 2014, topping the list of Albanian exports with a slight difference over minerals, fuels and electricity which in 2012 and 2013 emerged as Albania’s key exports thanks to a sharp increase in oil exports by Canada-based Bankers Petroleum.
Government has recently finalized a package of facilitating measures on garment and footwear producers in an effort to give a boost to this sector which has been the traditional top Albanian exporter and one of the key employers in the past two decades despite negative impacts from the Eurozone crisis in the past few years. The move comes after the corporate income tax was raised to 15 percent starting January 2014, sparking strong opposition by this business community, worried over losing competitiveness to regional peers applying 10 percent flat tax regimes.
The new package includes a series of measures which offer garment and footwear producers, locally known as fa谮, state facilities for a symbolic rent of only one Euro, accelerate VAT refunds to 30 days, and lift a series of customs barriers. However, the corporate income tax, a top concern for the fa谮 industry, will remain unchanged at 15 percent, the same to all medium-sized and big enterprises after Albania abandoned its 10 percent flat tax regime to replace it with progressive taxation starting 2014.
Exports of minerals, fuels and electricity slightly dropped by 3.5 percent in the first quarter of 2014, mainly due to lack of electricity exports which are expected to further influence on exports of this group due to the critical situation Albania’s hydro-dependant electricity sector is facing.
Exports of construction materials and metals remained almost unchanged at 7.3 billion lek (Euro 51.6 million), ranking the third most important Albanian exports.
Imports of machinery, equipment and spare parts, an indicator indirectly measuring business investments grew by only 4 percent to around 20.7 billion lek (Euro 145 million) in the first quarter of this year.
Italy and Greece remain Albania’s top trade partners with around 37 percent and 8 percent of trade exchanges respectively, followed by China with 5.6 percent and Turkey with 5 percent.
A double digit growth in exports was the key driver of Albania’s sluggish growth in 2013 at a time when domestic consumption and private investments registered negative growth rates.
Data published by the country’s Institute of Statistics show 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.
While the Albanian economy has considerably slowed down since the outbreak of the global economic crisis in late 2008, the good news is that exports have more than doubled in the past five years and the country has become less dependent on imports. The situation has considerably improved Albania’s trade gap although the slowdown in imports in 2012 and 2013 has been linked to shrink in consumption and investments.
Data published by the country’s state Institute of Statistics show the export/import coverage ratio rose to 48.1 percent in 2013 up from a mere 24.4 percent in 2009 and an average of 24 percent from 2000 to 2008.
