TIRANA, July 9 – A United Nations report has ranked Albania as one of the few above-potential economies managing to attract more foreign direct investment than expected in 2011. Albania’s FDI preserved the 1 billion dollar value even in 2011, remaining one of the most attractive countries in the South-East Europe region, says a recent report by the United Nations Conference on Trade and Development (UNCTD).
At USD 1.03 billion in 2011, Albania’s FDI was only 2 percent or USD 20 million lower than in 2010 when Albania became the second top performer in the region after Serbia. Renewable energy, agribusiness, textile industry, services to businesses, transportation vehicles and electronic equipment are some of the areas the Albanian Investment Development Agency (AIDA) has identified as priority fields to attract FDI. Government has also approved a 400 million lek innovation fund to support SMEs.
The report shows that a number of developing and transition economies have managed to attract more FDI than expected, including Albania, Cambodia, Madagascar and Mongolia.
The “above-potential” economies include, again, resource-rich countries that – even though the
Potential Index takes into account the presence of natural resources – exceeded expectations. This group also includes a number of countries such as Albania, which are in a “catch-up phase” for FDI, having embarked on a course to improve their investment climates.
The UN report indicates that global foreign direct investment (FDI) flows in 2011 surpassed the pre-crisis average – reaching US$1.5 trillion, despite persistent uncertainty in the global economy. However, flows still remained more than 20 per cent below their 2007 peak.
BoA: FDI continued growing
While domestic consumption and exports, the key contributors to economic growth suffered a setback in the first quarter of this year, foreign direct investment, remittances and tourism revenues all improved compared to the first quarter of 2011. Latest Bank of Albania data published this week show foreign direct investment (FDI) registered 186 million euros in the first quarter of 2012, up from only 83 million during the first quarter of 2011 registering an increase of 124%. After peaking in 2010, foreign direct investment registered a turning point last year when they fell to Euro 742 million, down from a record 793 million euros back in 2010, which made Albania the second largest recipient in SEE after Serbia. Bank of Albania data show FDI in 2011 dropped by 6.5 percent coming on downward trend for the first time since 2005.
Detailed central bank data show Greece remains the key foreign investor in Albania despite being in recession since 2008. Second comes, Italy with 401 million Euros of FDI at the end of 2010. The Bank of Albania data rank Austrian companies as the third biggest foreign investors in Albania with Euro 362 million, mainly in the banking and energy sector, followed by Canada with 280 mln Euro, mainly in oil exploration and production investments. Data show that monetary and financial intermediation has attracted the largest FDI inflows with 651 mln Euros, followed by the processing industry with 417 mln Euros and post-telecommunication and the extractive industry with 363 and 331 million euros respectively.
