2014-01-26 16:00:15 - Recently published research from Business Monitor International, "Lithuania Freight Transport Report 2014", is now available at Fast Market Research
Lithuania has seen robust economic growth, due to improvements in household consumption and strong exports, and has prompted a revised forecast of 3.4% year-on-year (y-o-y) real GDP growth, up from our previous forecast of 2.6%. This growth is reflected the country's freight sector, particularly the air freight sector, which is forecast to see growth of 9.68% y-o-y in 2014. Rail freight is also showing signs of steady, though modest, growth over our forecast period.
Lithuania's freight industry closely correlates with the health of the eurozone and in particular, the country's biggest trade partner, Russia, as these are the country's largest export markets. Therefore, the strength of the euro plays a key role in Lithuania's exports too.
Growth in Lithuanian exports of goods
and services remained in the double digits, averaging 14.6% yearon- year (y-o-y) in the first two quarters of 2013. Although higher household consumption and rising fixed investment have resulted in higher imports of goods and services growth, which accelerated to 14.0% y-o-y in Q213, average quarterly import growth in H113 stood at 12.7% y-o-y, moderately underperforming export growth and thus providing a net positive impact on headline economic growth in H113.
Full Report Details at
- www.fastmr.com/prod/763978_lithuania_freight_transport_report_20 ..
Headline Industry Data
* We expect air freight volumes to grow 12.9% to 16,668 tonnes in 2014. We believe growth will average 4.95% a year in the five years to 2018.
* At the Port of Klaipeda, we forecast growth in cargo volume of 1.5% to 35.05mn tonnes in 2014.
* We expect rail freight volumes to grow by 2.39% to 50.6mn tonnes in 2013.
* In 2013, we expect total road tonnage volume to increase by 3.33% to 50.04mn tonnes.
Key Industry Trends
Investment Sailing In...
The European Investment Bank (EIB) has agreed to extending a loan of EUR 87 million (mn) to the staterun port terminal operator Klaipedos Nafta AB to construct a liquefied natural gas (LNG) import facility at the port of Klaipeda. Lietuvos-Dujos, a Lithuania-based gas company, has executed a service agreement with Klaipedos Nafta, to operate the natural gas transmission system. There is some concern surrounding Gazprom's gas contracts coming to an end in 2015, surrounding the looming decision for a new Baltic LNG terminal, which ministers hope will begin construction in early 2014 once a decision on the location has been made.
High Speed Rail Baltica Plans Steam Ahead
The new high speed railway joint venture (JV), Rail Baltica, which is seen as one of the top five most important EU transport projects, could be operational by 2023, if construction starts in 2017-2018 as is hoped. The JV is made from representatives of Estonia, Latvia, Lithuania, Finland and Poland. The consortium aims to coordinate preparations for building the railway line, including preparing the financing applications of the project for the European Commission, harmonising legislation, and compiling the business plan. The infrastructure of Rail Baltica will belong to each specific state where it is located and every shareholder is to contribute 0.65 million euros a year over the next four years. The project has received an influx of investment, including a 19-year-maturity EUR 114 million loan agreement from NIB and JSC Lithuanian Railways. A Memorandum of Understanding (MoU) was also signed in 2013 for Turkey to join the establishedViking rail route. Belarus and Lithuania have also been discussing future opportunities for collaboration on the Viking rail project. In February 2013, the Viking train was reported to have increased its cargo since its launch in 2003 by 100 times. Lithuania and Ukraine have also announced the Viking train will be extended to reach shippers on the Black sea and towards the Baltic sea.
Lithuania-Russia Border Crossing Permit Signed
On March 15 2013, a protocol was signed for a new border crossing post to be opened between Rambynas, Lithuania and Dubki, Russia. Lithuania's border crossings have come under criticism from an ambassador from Belarus, who has said Lithuania must increase the amount of border posts, and called the current number of crossing posts inadequate.
Risks To Outlook
We believe despite our favourable outlook, the downside risks cannot be ignored. Lithuania's consumer is still weak and may struggle to increase spending levels over the next few years amid structurally high unemployment and tightening credit conditions in the West.
Some cause for concern presents itself with the news that the European Commission accused Lithuania of standing in the way of free competition due to existing cargo handling port operators getting alleged priority in terms of the renewal of lease agreements.
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