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Argentina Freight Transport Report Q1 2010Published by: Business Monitor International Published: Nov. 5, 2009 - 63 Pages Table of Contents
AbstractIn September the Inter-American Development Bank (IADB) approved a US$120mn loan to finance roadimprovement and maintenance work in a number of Argentine provinces including La Pampa, Entre Rios,Córdoba and Formosa. The loan was part of a US$2.5bn conditional credit line to support investment toimprove, expand, and rehabilitate the country’s overall provincial road network. The IADB commentedthat ‘the poor condition of the country’s secondary and tertiary road networks increases costs, making itsproducts more expensive’. It noted that around 80% of the country’s total cargo volume was carried byroad. IADB project team leader Rafael Acevedo-Daunas said annual investment of US$1.5bn wasrequired to maintain existing roads and eliminate the backlog of expansion and improvement projects.We continue to forecast GDP contraction of 1.0% in 2009, with the economy shrinking again by 0.9% in2010, confirming that Argentina will be hit more severely by the global downturn than had at first beenhoped. In 2011 we see a weak recovery with 1.2% growth, rising to 1.8% in 2012. Across our 2010-2014forecast period we are projecting average annual GDP growth of 1.2%, implying a sharp slowdown on the6.5% figure for the preceding five years. We maintain the main thrust of our mode-specific forecasts. The planned new gas pipeline to Bolivia hasfaced long delays. Airfreight was hampered by short-term radar safety concerns in 2007, and despiteinvestment from LAN Argentina, faces at best a slow recovery following the controversial renationalisationof Aerolineas Argentinas. We see the airline remaining loss making for some years tocome. Argentina’s aviation industry still seems to produce one or two bankruptcies every couple of years.We have also reined in our shipping forecasts. As a result of all these changes, our new overall freightcarried forecast is for annual average growth of 1.3% in 2010-2014, measured in millions of tonnes perkm. This is a steep fall on the 5.8% figure 2005-2009, when Argentina was recovering from the deepeconomic crisis of 2001-02. According to our latest estimates, transport and communications GDP will have contracted by 0.6% in2009, 0.4 percentage points (pp) less steeply than overall GDP, which we project to have fallen by 1.0%. For the 2010-2014 forecast period we expect the transport and communications sector to outpace theeconomy as a whole. It will achieve average annual growth of 1.5%, versus 1.2% for overall GDP. Thetotal value of transport and communications GDP will rise to US$64.7bn in nominal terms by 2013,representing 9.9% of Argentina’s GDP. The transport and communications sector employed around673,000 or 7.1% of the labour force, in2009. We see the figure rising to 708,000 by 2013, although as aproportion of the labour force it will remain unchanged at 7.1%. The background to this rather disappointing outlook on the transport side is the global slowdown and thecountry’s subdued role as a grains, agricultural and livestock commodities exporter. The route to marketwill continue to be via road, rail (and in some cases river), to the main ports and then onwards by ship tothe main export markets. Key export commodities will continue to be wheat, maize, sorghum, soya andbeef. The world’s soya boom affected freight transport demand, with a growing requirement for shipmentacross the Pacific to China leading to rising interest in trans-Andean freight from Argentina to Chile’sPacific ports. Road haulage will continue to be the dominant freight transport mode. Investment is still needed in boththe highways network and truck fleets but the recession will ease bottlenecks. Over the forecast periodannual average growth in road freight carried will be 1.3%, down from the 7.8% rate achieved over thepreceding five years. BMI now forecasts 1.6% annual growth in rail freight over the next five years, withnew investments helping to lift capacity. We are forecasting maritime traffic to grow by an annual average of 1.0%. This figure is lower because ofthe reduction in global shipping growth and gloomier prospects for agro industrial exports. We seepipeline throughput growing at 1.4% per annum (based on current pipeline development projects comingon-stream after delays), and inland waterways traffic, which has been starved of new investments,growing more slowly at 0.7% per annum. We see airfreight registering low growth rates, partly becausemuch of Argentina’s international trade remains in the relatively higher bulk/low value pattern and istherefore not particularly suited for transport by air. We are forecasting average annual airfreight growthof 1.7% in the forecast period. Get Full Details About This Report >> |
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