Estonia Freight Transport Report 2016
BMI View: Estonia's freight transport sector will continue to be affected by a drop in exports owing to alack of demand from Russian markets (as a result of the food import ban) in addition to continuingeconomic weaknesses in Europe and especially in the Nordic countries, two of which are Estonia's topexport destinations. Rail freight dominates the country's freight mix and will continue to do so over themedium term, benefitting from thawing tensions between Russia and the West over the longer term.
Estonia's economy has suffered since sanctions were imposed on Russia, and the ongoing tensions betweenthe West and Russia will also affect the tourist industry in Estonia. However, we still remain bullish onEstonia's transport capabilities and for telecoms, the low-tax environment combined with a highly skilledworkforce will benefit ICT services. Estonia's economy has shifted towards a more positive outlook andwill post relatively strong real GDP growth over the next two years. With regard to exports, beyond theslightly pessimistic short-term outlook, Estonian exports are forecasted to improve over the medium term.
The recovery in the British and US economy will see exports to these markets rise. In addition, we believerelations between the West and Russia will thaw, increasing Estonian exports to the east. However, exportsmay not go back to the levels seen before the outbreak of the Ukraine crisis by the end of our forecastperiod.
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