Exports have started 2024 continuing the downward trend that was present throughout most of 2023.

Data from the Institute of Statistics (INSTAT) revealed that exports of goods reached the value of 29 billion lek, decreasing by 29.2%, compared to the same period a year earlier, and by 20.7%, compared to December 2023. This is the largest monthly decline since the time of the pandemic.

“Minerals, fuels, and electric energy”, “Textiles and footwear”, and “Construction materials and metals” were the groups that influenced the sharp decline in exports.

During January 2024, in the 29.2% decrease in exports, the groups that mainly influenced were: “Minerals, fuels, and electric energy” with 19.5 percentage points, “Textiles and footwear” with 5.0 percentage points, and “Construction materials and metals” with 3.8 percentage points, etc. While positively, the groups that influenced were: “Chemical and plastic products” with 0.3 percentage points and “Food, beverages, tobacco” with 0.1 percentage points.

After a positive trend in 2022, 2023 was very negative for domestic exports due to unfavorable international conditions, price declines on exchanges, and especially the exchange rate, as the depreciation of the euro reduced exporters’ revenues when converted into lek.

The textile and footwear industry were the hardest hit, with companies already starting to lay off employees due to declining orders from foreign partners. The latter are shifting production to countries with lower labor costs.

Trade deficit widens

Unlike exports, imports of goods have increased, worsening the trade deficit. According to INSTAT, imports of goods reached the value of 60 billion lek, increasing by 3.4%, compared to a year earlier, and decreasing by 17.3%, compared to December 2023. The trade deficit for this month is 30 billion lek, increasing by 88.6%, compared to January 2024, and decreasing by 13.5%, compared to December 2023.

Exports fall towards Italy, Kosovo, and Germany

In January 2024, the countries with which Albania experienced the largest decline in exports, compared to January 2023, are: Italy (7.6%), Kosovo (20.1%), and Germany (34.7%). While the countries with which exports had the largest increase are: Croatia (59.3%) and Austria (17.6%). In January 2024, the countries with which Albania had the largest increase in imports are: Italy (2.7%), China (2.1%), and Greece (36.3%). While the countries with which imports had the largest decrease, compared to January 2023, are: Turkey (5.6%), Spain (16.4%), and North Macedonia (5.1%).

Trade exchanges with EU countries account for 58.4% of all goods trade. In January 2024, exports to EU countries accounted for 77.8% of total exports, and imports from EU countries accounted for 48.9% of total imports. Albania’s main trading partners are: Italy (29.7%), Greece (7.7%), Turkey (7.6%), and Germany (7.0%).