FDI rose 3.6% in 2017: Tough future for Albania’s economy as major projects enter ending stage

Foreign direct investment in Albania amounted last year to 970 million euros.

According to Bank of Albania’s statistics, foreign investments closed another year on the rise, with about 3.6% more compared to 2016.

In fact, the fourth quarter of 2017 was not very good, and foreign investments declined compared to the same period of 2016.

However, the annual growth of foreign investments came after the review of previously published data on the balance of payments.

In particular, the foreign investment inflow in the third quarter of last year has been revised by the Bank of Albania, while the value of 2016 has been revised downwards.

With this statistical correction, it turns out that foreign investments maintained the upward trend even during 2017.

It is believed that last year, investment growth was supported especially by major projects in the energy sector, but also by the extractive industry and financial services.

Mainly, the growth is owed to ongoing projects.

Advancing work on energy projects and entering the downturned investment cycle raises the question whether the Albanian economy will manage to absorb comparable foreign investment figures in the next years as well.

After 2013, high foreign investment values ​​have been among the key contributors to economic growth in Albania.

Another important source of income for the economy, remittances, are still low.

In the fourth quarter, Albanian nationals working abroad brought some 172 million euros to the Albanian economy.

While for the whole 2017 this figure reached 636 million euros, marking an increase of 3.4% compared to 2016.

Since 2015, the value of remittances has returned to growth after the sharp fall during the first years of the economic crisis in the Eurozone.

Despite these improvements, figures are far from the record of 950 million euros annually registered in the mid-2000s.

The Bank of Albania estimates that remittances are mainly used for consumption, but also for medicines, education, or real estate investments.

SCAN

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