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SPAK shocks the elite of organized crime, arrested and wanted the strongest of
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This is how Altin Dumani avoided the highest leaders of the State Police for fear of deconspiracy in the SPAK "blitz" action against well-known characters of the world of crime

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BREAKING NEWS

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BREAKING NEWS

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BREAKING NEWS

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Edi Rama speaks openly, from the details of the phone call with Erion Veliaj
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Romeo Kara: This is why Sali Berisha should immediately go to prison and the strong evidence that Kosta Trebicka had for the former prime minister that sinks him in the "Gërdec" affair

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Ekonomia

High prices and the strengthening of the Lek, the profits of foreign investors in Albania reached the value of...

High prices and the strengthening of the Lek, the profits of foreign investors

The profits of foreign investors in Albania exceeded the level of 1 billion euros and reached the highest historical level last year.

The data of the Balance of Payments show that the income of foreign investors in 2023 reached the value of 1.014 billion euros, an increase of 14.6% compared to the previous year.

This amount represents the item of income from investments in the Balance of Payments and includes the distributed or reinvested profits of foreign investors in our country.

If we subtract the value of reinvested profits from the total amount of investment income, the amount withdrawn by foreign investors last year (in the form of dividends or yields from portfolio investments) can be calculated at 211 million euros, with a 37% increase compared to 2022.

In the opposite direction, the incoming flows of investment income (income of the Albanian economy from investments abroad) for 2023 increased to 200 million euros, 43% more compared to 2022.

However, the net balance of investment income was broadly negative at 813 million euros. The deficit in this item increased by 9.3% compared to the previous year.

Given that foreign investments in Albania are much larger than Albanian investments abroad, the net balance of investment income has historically been negative.

The increase in the profits of foreign investors in recent years can be explained by several factors.

The rapid recovery of the economy after the pandemic has also brought positive effects to foreign companies operating in Albania, influencing the increase in profits.

However, a good part of the increase can be attributed to the strengthening of the Lek in the exchange rate with the Euro. At the end of 2023, the exchange rate between the Euro and the Lek was 9% lower compared to the same period a year ago, while in certain annual periods the exchange rate reached up to 14%.

Foreign companies generally provide their income in Lek, while they distribute profits to shareholders in foreign currency. The strengthening of the Lek has caused the same amount of local currency to be translated into a higher value in foreign currency, mainly in Euro. For this reason, among the actors who have benefited from the fall of the Euro in the exchange rate, there are also foreign investors.

Since a good part of the profits are not distributed, but reinvested, the strengthening of the Lek, indirectly, has also influenced the growth of foreign investments in recent years.

Reinvested profits in recent years have taken the main weight in the structure of foreign direct investments. For 2023, the value of profits reinvested by foreign enterprises reached 803 million euros, 10% more compared to 2022.

Reinvested profits accounted for 54% of the total value of Foreign Direct Investments for the past year./Monitor

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