Latvia Freight Carried To Grow 2.7% Per Annum Over The 2010-2014 Cites New Study

PR Log (Press Release) – Jan 03, 2010 – In October, Latvia's two largest ports (Riga and Ventspils) announced their tonnage throughput results for January-September 2009. Port News reported that as per data provided by the port administration of the Free Port of Riga, the facility has handled 22.36mn tonnes - a year-on-year (y-o-y) increase of 1.9%. This total tonnage figure is made up of 14.38mn tonnes of bulk cargo, a y-o-y increase of 0.3%; 4.93mn tonnes of liquid bulk cargo, a y-o-y increase of 28% and general cargo, which posted a throughput of 3.05mn tonnes, a decline of 19% on the 2008 figure for the same period. BMI is forecasting that for the whole of 2009 the port of Riga will handle 29.59mn tonnes, a y-o-y growth of 0.08% compared with the port's total throughput in 2008 of 29.56mn tonnes. We believe our forecast for the port of Riga to be achievable, as with just three months left of 2009, we predict that the port will handle about 7.23mn tonnes. The port of Ventspils recorded a total tonnage throughput of 20.71mn tonnes for the first three quarters of 2009, a y-o-y growth of 2.8%. This figure is made up of 5.75mn tonnes of bulk cargo transhipment and 13.9mn tonnes of liquid bulk transhipment, a y-o-y growth of 1.71%. The port of Ventspil's operations are dominated by the transhipment of oil products that made up 12.83mn tonnes of the 13.9mn tonnes of liquid bulk transhipped in the first nine months of 2009. We predict that by the end of 2009 the port will have catered for 29.68mn tonnes of cargo, a y-o-y growth of 3.89%. BMI's forecasts are on course to be realised as a throughput of 8.97mn tonnes of over the last quarter of 2009 is achievable, in our view. BMI notes Latvia's ports have done well to continue achieving positive growth in 2009, as we forecast the Baltic state will post a total trade decline of 30.77% for the full year. We predict the country's total trade will begin to pick up in 2010 with a growth forecast of 1.5%. We see the Latvian economy slowing dramatically, with contraction of 2.0% in 2008, followed by a massive slump (GDP down 18.4%) in 2009, and a third year of contraction (-2.3%) in 2010. With a fairly weak recovery following on from there, we expect average annual GDP growth of 2.3% over the 2010- 2014 period. This is slower than over the preceding five years, when GDP expansion averaged 2.5% a year, a figure that was pulled down by the freefall in 2009. BMI is maintaining various adjustments to our mode-specific freight-carried forecasts. We reduced our estimates for rail freight, largely as a result of lower Russian transit traffic starting in 2006. We now expect freight carried across all modes of transport to grow by an average of 2.7% per annum over the 2010-2014 period. According to our latest estimates, transport and communications GDP fell by a dramatic 18.4% in 2009, on a par with GDP up by 10.3%. For 2010-2014, we expect the transport and communications sector to be in step with the economy as a whole, with both expanding by an annual average of 2.3%. The total value of transport and communications GDP will rise to US$3.6bn in nominal terms by 2014; 15.5% of Latvia's GDP. The transport and communications sector employed 91,500 people, or 9.4% of the labour force in 2007. We see that holding steady to 2014 and remaining at 9.4% of the labour force.

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