The economy's external deficit fell by 41% in the first quarter of the year

2025-06-30 22:57:00, Ekonomi CNA

The current account deficit narrowed in the first quarter of the year. Statistics from the Bank of Albania show that the current account deficit fell to 212 million euros, 41% less compared to the same period last year.

The contraction of the external deficit in the first quarter came in parallel from the decline in the deficit in goods and the further expansion of the surplus in services.

For the first quarter, the trade deficit in goods decreased to 1.17 billion euros, down 5.4% compared to the previous year. The improvement in the trade deficit in goods came from the increase in exports, which were 29% higher compared to the first quarter of the previous year.

In parallel, the surplus in the services account reached 696 million euros, an increase of 11% compared to the first quarter of last year.

The main contribution to the services account was again made by tourism, which brought in net income worth 295 million euros, an increase of 10.5% compared to the first quarter of last year.

Even revenues from services for processing physical inputs owned by others (fabrication) recorded an increase of 4.7% compared to the first quarter of last year.

Other professional services provided by Albanian entities to non-residents also increased to 133 million euros, 20% more compared to the previous year.

A positive effect in the first quarter was also provided by the slight decrease in the primary income deficit, which mainly includes income from labor and investments, as well as a small increase in the secondary income item, which mainly consists of emigrant remittances.

The value of remittances during the first quarter reached 251 million euros, up 3.7% compared to a year earlier.

The balance of payments figures also include the effect of the exchange rate. The strengthening of the Lek against the Euro tends to have a positive impact on the current account deficit. At the end of the first quarter of 2025, the Euro was trading at 99.29 Lek, down 3.5% compared to the same period a year earlier.

Although the current account balance as a whole remains negative, the financial account and especially foreign direct investments continue to bring significant flows, which even in the first quarter compensated for the current account deficit. Foreign direct investments had a value of 354 million euros, which is 167% of the value of the current account deficit./ Monitor.al