Page 31 - SE Outlook Regions 2023

2.1.2 External environment

Albania’s foreign trade has largely recovered following the dip during
the first year of the coronavirus pandemic.

The latest figures from statistics office Instat, for October 2022, show a
continuing increase in both exports and imports.

A sharp increase in textiles exports was the main factor behind the
12.5% year-on-year increase in Albania’s exports to ALL38bn in
October.

After the export-oriented Albanian textiles industry was badly hit by the
pandemic – when non-essential stores were shut in most markets and
people cut down spending on clothes and accessories – it has since
been recovering.

Textiles and footwear contributed 6.9 percentage points (pp) to the
overall y/y increase in exports in October, with smaller contributions
from other sectors including machinery, equipment and spare parts (2.8
pp) and mineral, fuels, electricity (2.3 pp).

Albania’s government is hoping to achieve record agricultural exports of
€550mn in 2022.

The European Bank for Reconstruction noted the contribution of the
strong tourism season in summer 2022 to boosting “external and fiscal
accounts ahead of the challenging heating season”.

“A tourism season exceeding expectations pushed services exports
and commodity exports, mainly primary commodities, construction
materials and textiles, benefited from price advantages and tight supply
chains,” commented the European Commission in its autumn set of
forecasts.

However, towards the end of the year, some key export sectors were
impacted by falling demand and higher prices of energy and other
input. October saw a y/y fall in exports of construction materials and
metals that dragged total exports down by 3.2 pp.

Imports in October reached ALL83bn, up 8.6% y/y but down 5.3%
month on month. The trade deficit was ALL45bn, up 5.5% y/y but down
8.7% m/m. Albania typically runs a large trade deficit.

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