Exports are not enough,improving demand increases imports and the deficit

The gradual improvement of domestic demand is increasing imports and deepening the country’s trade deficit.According to the Institute of Statistics, trade deficit in July grew by 3.1% over the same period a year earlier.

The trade balance of goods was negative in the value of ALL 182 billion, for the first seven months of the year. Although, the deficit remains lower compared to the first half of last year, it has a growing trend.

The Bank of Albania in its projections expects the contribution of net exports in economic growth to be lower due to the expected increase of imports and deficit. Imports increased by 5.4% in July compared to the same period a year earlier. While for the whole seven-month period, Albania imported goods at the value of ALL 367 billion, up by 4.7% on an annual basis.

Especially contributing in the growth of imports are two groups, “machinery, equipment, spare parts” and “fuel and energy”. The increase in the import of machinery and equipment demonstrates a still high performance of investments in the economy, while the import value of fuels is also increasing this year. Exports increased again in July, up by 7.9% compared to the previous year.

The total value of exports reached ALL 185 billion, for the seven-month period, an annual increase of 16.8%. Exports are convincingly guided by the Faso sector. The “textile and footwear” group exported goods for seven months to ALL 75 billion, an increase of 8% compared to the previous year.

But the growth of exports is also supported by the return growth of the “minerals, fuels, energy” and “building materials and metals” groups. Despite the double-digit growth of exports, the revival of imports is exerting increasing pressure on the country’s trade deficit.

SCAN

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