The rapid growth of investment during 2013 was due to several privatizations carried out during the first half of 2013, as the purchase of two hydropower plants by the Turkish company, Kürüm. The value of this privatization was 110 million Euros. Meanwhile, remittances have dropped rapidly. During 2013, remittances were down to 500 million Euros, marking the lowest value of the last 10 years. This confirms the decline of the contribution of remittances to the national economy, at a time when economic conditions in Europe due to economic crisis have significantly reduced their incomes.
Source: Bank of Albania
Coments and Analyses: ODA
The data show that remittances have continuously decline, while foreign direct investments have had a more positive performance.
Source: Bank of Albania
Coments and Analyses: ODA
During 2013 the difference between remittances and FDI is significant in terms of foreign investments, thus confirming the reduction of the share of immigrants and their contribution to the local economy. However the tendency to have foreign investment and better employment market in the country is still too fragile and not stable, at a time when its growth has come as a result of privatization and not from direct investments by foreign companies in the country.
Open Data Albania has also updated data on the report of the value of Remittances against Foreign Direct Investments. Both these indicators are inflows in balance of payments and are two important indicators that show the growth of national economy.
Over a longer period of ten years 2002-2012, the ratio of these two values appears interesting. During 2002- 2006, FDI stood inferior against remittances value. In this four-year period migrants brought home 3 – 4.5 times more Euro than the value of Foreign Direct Investments.
During 2006-2013 is registered a progressive growth of the value of Foreign Direct Investment. This period marks a positive trend for the local economy. By this comparative analysis, how are remittances positioned against FDI it can be analyzed the role of each indicator in the domestic economy.
Source: Bank of Albania
Coments and Analyses: ODA
This percentage has been declining which proves once again that if in the first period of the decade, remittances helped to develop the economy as it occupied a very important part of GDP, in the second part this situation is changing in favor of FDI.