Albania’s FDI drops sharply in Q2

Albania’s FDI drops sharply in Q2
By bne IntelliNews September 11, 2017

Foreign direct investments (FDI) in Albania went down by 20% y/y to €200mn in the second quarter of 2017, according to preliminary central bank data on September 11.

In the first half of the year FDI totaled €380mn, down by 7% from the same period a year ago.

The decline in foreign investment was expected by experts, because so far FDI has relied mostly on the construction of the Trans Adriatic Pipeline (TAP) project and the HPP Devoll, which are short-term projects, and diversification is required in the medium term.

Compared with the previous quarter, FDI was down by 11% in Q2.

Of the total net FDI, €214mn came in the form of capital expansion and a negative flow of €14mn from debt relations between companies, preliminary balance of payments data indicated.

Inflows in the form of direct investments were concentrated in the energy sector (about 35%), hydrocarbons (17%), and financial intermediation (about 12%), according to business news provider Monitor.

In 2016, FDI in Albania increased by 10.4% y/y to €983mn, which is a record high figure in the last four years, with FDI estimated to account for around 10% of projected GDP.