2013-12-04 11:24:26 - Recently published research from Business Monitor International, "Slovakia Freight Transport Report 2014", is now available at Fast Market Research
The 2013 growth forecast for Slovakia was raised to 0.8% from the 0.5% estimated in June by the Finance Ministry. The move is attributed to an improvement in the euro region after six quarters of declines. The rebound has led to a rise in demand for exports, such as cars assembled by the Slovak unit of Volkswagen Group, which will provide welcome news for Slovakia's freight industry.
The improved growth forecast is also supported by an increase in household spending, which was driven by falling inflation and rising consumer confidence. Meanwhile, the ministry has kept the forecast for 2014 growth unchanged at 2.2%, but expects it to rise to 2.9% in 2015.
Emerging Europe as a region faces increased competition from periphery
eurozone to capitalise on improving external demand into 2014. Regional economies best placed to meet this challenge are those which have made significant competitiveness gains through fiscal discipline, rather than those who have focused on FX weakness to boost global share of exports.
Full Report Details at
- www.fastmr.com/prod/723508_slovakia_freight_transport_report_201 ..
This year is set to represent a steadying of the ship in terms of year-on-year (y-o-y) growth across the freight modes after a bad year in 2013. Road freight is set to lead the way with annual growth pencilled in at 2.77% for 2014, slightly ahead of rail freight (2.55%) and air freight (2.00%). 2013 saw the rail and road freight sectors both see y-o-y contractions in growth (3% and 1% respectively) so a return to positive growth is welcome news for the industry.
Headline Industry Data
* 2014 Air freight tonnage throughput is forecast to increase by 2.00%.
* 2014 Rail freight tonnage throughput is forecast to increase by 2.55%.
* 2014 Road freight throughput is forecast to increase by 2.77%.
* 2014 trade growth forecast at 6.41%.
Key Industry Trends
Government Approves ZSSK Cargo Restructuring - The government of Slovakia has given the green light to proposals by the Ministry of Transport regarding restructuring and part-privatising the country's state-owned railway company ZSSK Cargo. The restructuring approval was granted by the government on July 10 and comes as a result of the ZSSK Cargo being hard hit by the global economic recession, as well as the slump in the domestic steel industry.
European Rail Corridor Takes Step Forward - A new broad-gauge freight rail corridor that will run through Slovakia to Vienna, linking some key markets, took another step towards in July 2013 with the coalition entitled Breitspur Planungsgesellschaft (comprising the four national railway firms of Slovakia, Russia, Austria and Ukraine) stating that a tender was soon to be announced relating to design and survey work.
CD Cargo and ZSCS May Be Set To Merge - Czech rail freight company CD Cargo and Slovak rail freight company ZSCS had repeated talks regarding a merger, reported Prague Daily Monitor in January 2013. Both companies have experienced financial difficulties and a merger would enable them to maximise their profitability. A deal was never struck.
Key Risks To Outlook
Within emerging Europe there is a massive divergence in levels of competitiveness, resulting from both policy choices and more structural issues. In an attempt to highlight this divergence we have calculated the proportion of GDP growth from exports which is down to a recovery in global trade, and how much is a result of competitiveness improvements within these economies. Although we are wary of drawing firm conclusions, using historic data since 2009 and our 2013 forecasts the results of this analysis reinforce many of our own views on the changes in relative export competitiveness within the region.
Prime Minister Robert Fico comfortably survived a no confidence vote in parliament on September 18, after a two-day debate over the state's purchase of a minority stake in gas company Slovensky Plynarensky Priemysel (SPP). 82 members of Fico's Smer-SD party, an absolute majority in the 150-seat parliament, voted in support of the government, while 59 voted against. The move shows Fico's relatively stable position as leader, though also highlights a growing divide in parliament - the debate descended into a brawl at one stage - which does not bode well for consensus politics on key issues.
The government has approved financial assistance to manufacturing firms throughout the country as part of its programme to encourage investment and job creation in the private sector. Several firms, both national and foreign, received support - largely in the form of tax relief - as reward for committing to expand operations in the country and hire new workers. The government's policy is helping to keep business activity afloat amid an economic slowdown, though will do little to tackle high structural unemployment in Slovakia.
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