Is the Albanian economy affected by the conflict in the Middle East? Price stability alert

2024-04-15 14:35:40Biznes SHKRUAR NGA REDAKSIA VOX

In recent years, tensions that have escalated to attacks have made the political order, but also the economic one, uncertain. While the world was somehow returning to the economic balance affected by a war on the borders of Europe between Russia and Ukraine, recently we have another danger on the scene that is expected to affect the world economies again.

The question arises: Does the conflict in Israel spark alarm about price stability?

The war in Israel is expected to have impacts on the economy of many countries, including Albania. Even before, experts have predicted an increase in the price of fuels, because the largest import of them is carried out by the countries of the Middle East.

Also, the conflict could raise energy prices on international exchanges.

"Scan Intel" has analyzed the trade relationship between the countries of the Middle East and Albania, to see in more detail how this conflict can affect.

From the analyzed data, it is noted that the weight of Albania's imports with the countries of the Middle East is estimated at 13%, which means that the economy of our country would be affected not only indirectly, but also directly.

Let's analyze in more detail Albania's relations with Israel and Iran, as well as their weight in the Albanian economy.

Albania and Israel have been parties to diplomatic and economic agreements for 32 years in a row. Reciprocal and comprehensive activities between the two countries are related to trade exchanges, which have shown an interesting trend in recent years. Total imports in 2023 reached the value of 4.3 billion lek, reflecting a decrease compared to the previous year, but higher than in 2021 and 2020. Regarding the share of imports with Israel, it turns out that these imports account for 0.5 % of total imports. "Scan Intel" has analyzed this relationship in absolute terms according to the chapters, where it turns out that the highest imports are those of fuels, minerals and oils

But how are trade relations with Iran presented?

The Albanian government has decided to sever diplomatic relations with Iran more than a year ago, as a result of the results of the investigation into the cyber attack that happened earlier against the main pages of the administration.

But how are the economic relations between the two countries?

The data show that Iran occupies a rather small weight in trade exchanges with our country. In terms of imports, at least referring to the data for the year 2023, the figures show that Iran occupies only 0.03% of the total in value.

It is about a total of 291 million ALL of imports throughout the year. If we turn to exports, we see that the importance of Iran in our trade exchanges is even more insignificant.

In terms of foreign investments, the presence of several Middle Eastern countries stands out, but with a low weight, except for Turkey, which is among the main investors.

Since Albania is a country that depends on imports, the chain effects of the conflict can also be reflected in the Albanian economy. We emphasize that the Middle East is a point of geopolitical interest due to its location and exit to different seas, so in a way it represents the border between the West and the East, but also due to mineral and energy wealth such as oil, natural gas, gold etc.