Rising exports and appreciation of Lek curb Albania’s trade deficit growth

The positive performance of exports and the strengthening of the Lek have at the moment curbed Albania trade deficit close to last year levels.

According to the Institute of Statistics, the trade deficit narrowed by 7% in March compared to the same month 2017.

For the first quarter of the year, the trade deficit was about All 71 billion, with a slight increase of only 1.2% compared to Q1 2017.

The trade deficit stabilization comes mainly due to export growth, which for March have marked an annual growth of 15%.

While progressive data show that for Q1 of the year, exports reached ALL 74.5 billion, 19% more compared to the same period last year.

Forward processing industry still dominates Albanian exports, with 42% of the total and marked again an increase in March.

However, the biggest contribution this month came from exports of the “mineral, fuel-powered” group.

Exports of this group increased by 30% compared to last year.

Instat does not offer further details over the data of the group, however this increase may be related to the increase of energy exports, thanks to the improvement of the flows in the Drin cascade.

Import of goods increased during March by 2.2%, while for Q1 the growth was 9.6%.

Imports are on the rise for all groups, indicating that domestic demand is constantly improving.

However, at present, the growth of imports is not giving a big impact to the country’s trade deficit, also thanks to the strengthening of the lek vis-a-vis the euro and the dollar.

Since the value of imports is greater than exports, the lek appreciation positively affects the trade balance.

Keeping trade deficit under control will be important for maintaining the economic growth trajectories.

In the second half of last year, the growth of trade deficit was one of the factors that slowed the country’s economic growth.

SCAN

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