We anticipate that growth in Brazil's freight transport volumes will outperform the Latin American giant's real GDP growth over our medium-term forecast period (2015-2019), across all modes. Brazil will remain mired in a period of low growth in the coming years, due to a slowing consumer story, persistent business environment challenges, and a weaker external environment. Nevertheless, steady gains in mining and agriculture output will ensure that freight volumes keep growing.
Real GDP in Brazil will contract in 2015 for the first time since 2009. Private consumption will face rising headwinds this year from higher taxes. We forecast real GDP to contract by 0.5% in 2015, a significant revision from our previous forecast for a 0.6% expansion. Despite a contracting economy, we expect positive growth in each freight mode, supported by the countries well established agribusiness and mining sector, as well as demand from private consumers.
Volumes transported on Brazil's rail freight network are set to continue advancing at a healthy rate in 2015. Our 2015 growth forecast anticipates growth at 2.1%, which if realised would see 474.9mn tonnes transported by rail this year, a consolidation of 2014's return to growth after 2013's contraction of 2.1%. We note that this growth outlook for Brazilian rail freight is conservative, and risks for the short term are weighted to the upside. Money is being invested in developing the sector, in part in order to ensure it is capable of handling an expected increase in volumes for the Rio de Janeiro Olympic Games in 2016.
We forecast slow but steady growth in Brazil's well-developed road freight sector in 2015. We expect growth of 0.9% to reach 1.6bn tonnes, supported by mining and agricultural output. We caution that risk to our outlook is posed by regular labour disputes which bring road freight to a standstill. In April 2015 thousands of independent Brazilian truckers disrupted supply chains by striking in five states across the country in protest of low wages. The delays have been particularly harmful to poultry exporters who have seen their shipments of feedstuffs and frozen chicken delayed. Truck blockades inflicted earlier in 2015 are estimated to have cost the poultry industry BRL700mn (USD235mn).
Brazil's air freight volumes are continuing to outperform the sluggish growth we are seeing in developed markets. In 2015, we forecast that the country will see growth in air freight volumes (tonnes /km) of 6.8%, rising to 1.858mn tonnes, from 2014's estimated volume figure of 1.739mn tonnes, which represented growth of 6.5%. Air freight volumes will be supported by Brazil's private consumers. Despite the fact that real private consumption growth will remain off its recent highs, we expect steady growth, with private consumption expanding by an annual average of 2.5% between 2015 and 2024, providing a good base for air freight volumes.
Key BMI Forecasts
Air freight tonnes to grow 6.81% in 2015 to reach 1.85mn tonnes/km. Over the medium term, to 2019, we predict that growth will average 7.7% a year.
Rail freight tonnes to grow by 2.1% in 2015 to reach 467mn tonnes. To 2019, we predict average annual growth of 2.7%.
Road freight tonnes to grow by 0.9% in 2015 to reach 1.6mn tonnes. To 2019, we predict average annual growth of 1.7%.