Trade deficit, record level of 5.2 billion euros - Euro depreciation and rising costs, consequences for exporters
The depreciation of the euro in the domestic market, but also other developments, such as the increase in costs as a result of external factors, in recent years, are having consequences on the structure of our country's foreign trade.
Official data published by the Institute of Statistics shows a trade deficit of 53 billion lek or approximately 530 million euros for December alone, an increase of over 51% compared to December 2023 and 23.8% compared to November 2024.
While for the entire year 2024, the trade deficit reached a record of 522 billion lek or about 5.2 billion euros, the highest level in history.
On an annual basis, the trade deficit increased by 20.7% during 2024, compared to 2023. This deepening of the trade deficit is due to the annual decline in exports by 15.4%, to the value of 373 billion lek or 3.7 billion euros, and the increase in imports by 2.5% to the total value of 894 billion lek, or 8.9 billion euros, increasing by 2.5%, compared to the previous year.
If we cross-reference INSTAT's foreign trade data with those of the Bank of Albania on the performance of the euro/lek exchange rate, it is striking that the expansion of the trade deficit began when the European currency was approaching the 100 lek mark, around March of last year.
Meanwhile, on August 12 of last year, for the first time in history, the euro fell below this psychological limit, and is currently trading near 98 lek.
According to INSTAT figures, the groups that have negatively impacted the annual decrease in exports are: "Minerals, fuels, electricity", down by 5.3 percentage points, "Textiles and footwear" down by 4.8 percentage points, "Construction materials and metals", down by 4.1 percentage points.
Companies operating in this sector have long warned about the difficulties that the fall of the euro is causing in the domestic market and are now being forced to reduce the workforce, move towards a closed cycle, or look to other sectors of the economy.
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