Kazakhstan Freight Transport Report 2016
BMI View: Over the course of both the short and medium term, road freight will cement its dominance across the freight modes in terms of both total volumes handled and y-o-y growth. In 2016, annual gains in road freight will be 11.0%, while air freight will see steady y-o-y growth of 5.60%, rail freight will see annual gains of 1.81% and we forecast y-o-y increases of 3.20% in inland waterways. Underpinning our confidence around Kazakhstan going forward is the country's imminent accession to the World Trade Organisation, which undoubtedly signals the willingness of the West to accommodate Kazakhstan's demands due to its growing geopolitical significance - a boost to the freight industry.
In terms of the domestic economic outlook, the Kazakh National Bank (KNB) expanded the trading corridor of the tenge by KZT10 to KZT170-198/USD from KZT170-188/USD previously on July 15, with the tenge weakening by 0.1% to KZT187.07/USD on the move. We have repeatedly cautioned that pressure on the tenge would mount in H2 2015 and it was so. Markets appear to have underestimated the impact of a breakthrough in Iranian Sanctions negotiations on oil prices, which saw Brent crude prices head lower in H215. Oil prices are the main determinant of the tenge's trajectory, as oil exports comprise 78% of Kazakhstan's total exports, a factor not lost on the country's freight industry, which is responsible for transporting the country's large reserves.
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