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.
With China the key trade partner to Kazakhstan in terms of exports, it will be with apprehension that news of the Chinese economy, predicated on factors such as deepening producer price deflation, weak energy consumption growth, contracting manufacturing activity, and a contraction in monthly rail freight volume, will be met. As such, we maintain our below-consensus forecast for real GDP growth to come in at 5.9% in 2016, down on 2015's figure, and bad news for Kazakhstan freighters.
The outperforming freight mode in y-o-y terms is set to be road freight with double-digit growth once more the order of the day. Growth in this mode is also set to remain strong over the medium term, as continued strong trade links with China and Russia (both of whom Kazakhstan shares a land border) will boost road and rail freight. Rail is forecast to see steady, if uninspiring growth over the medium term, but the sheer geographical size of Kazakhstan, the country has 14,184km of railroads, putting it at 18th place in the world, according to CIA World Factbook, means this mode will continue to be an important part of the mix. Air freight growth is an emerging mode in Kazakhstan's mix but is still important as growth is set to be healthy over the medium term, buoyed by growing sales in the over-the-counter (OTC) drugs market - expenditure on OTC medicine in Kazakhstan is forecast to increase from KZT106bn (USD59mn) in 2014 to KZT158bn (USD64mn) in 2019.
Headline Industry Data
2016 Air freight tonnage is expected to grow by 5.60%
2016 Rail freight is forecast to grow by 1.81%
2016 Road freight is forecast to grow by 11.00%
2016 Inland waterway freight is forecast to grow by 3.20%
2016 Total real trade growth is forecast at 3.49%.
Key Industry Trends
Qatar, Kazakhstan To Boost Bilateral Trade: A boost to Kazakhstan's freight industry presents itself in the form of the strengthened trade links with Qatar. Qatar and Kazakhstan held the fourth joint committee session in the Qatari capital of Doha on October 18-19, reported Qatar News Agency. During the meeting, the two sides reviewed cooperation in the fields of trade and investment, as well as other related areas, such as civil aviation, energy, culture, sports, tourism and agriculture. Representatives from both countries agreed to take measures to strengthen economic relations and boost the volume of trade.
Trade Outlook To Improve On Rising Geopolitical Significance: Meanwhile, Kazakh President Nursultan Nazarbayev's time-tested ability to balance between the competing interests of global powers will ensure beneficial terms of trade for Kazakhstan with both the West and Russia.
Risks To Outlook
Kazakhstan completed the negotiations for its accession to the World Trade Organisation (WTO), lasting nearly 20 years, with the final stage being the acceptance of its membership bid by the WTO's General Council in late July, which is widely perceived to be a formality. While details of the terms of Kazakhstan's accession are not yet available at the time of writing, we believe that the treaty will benefit Kazakhstan's terms of trade with both the West and Russia, thus providing upside risk to our freight forecasts over the medium to long term.
The Kazakhstan Freight Transport Report has been researched at source, and features latest-available data covering commercial transport and logistics by road, rail, air and water; industry forecasts, company rankings covering leading national and multinational operators; and analysis of latest industry trends, opportunities, projects and regulatory changes.
BMI Research's Kazakhstan Freight Transport Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Kazakhstani freight transport and logistics industry.
- Benchmark BMI's independent freight transport industry forecasts on Kazakhstan to test other views - a key input for successful budgetary and planning in the strategic freight transport market.
- Target business opportunities and risks in the Kazakhstani freight transport sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Kazakhstan.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs, and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering freight transport and logistics, regulatory changes, major investments and projects and significant national and multinational company developments.
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the freight transport sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2008-2012) and forecasts to end-2019 for all key industry and economic indicators (see list below), supported by explicit assumptions plus analysis of key downside risks to the main forecast including:
- Transport Sector: Total freight carried by road, rail, inland waterways, maritime, air and pipeline (mn tonnes-km/mn tonnes).
- Trade: Exports and imports (USDmn) by category of goods (manufactured goods, food, chemicals etc.); top five import and export trade partners (USDmn); imports/exports to each global region (USDmn)
- Port Data: Throughput (‘000 tonnes) for all major ports in the state.
- Oil Products Prices: Price forecasts for gasoline and aviation fuel (USD/bbl) at all major global energy trading hubs.
- Economic Indicators: Nominal GDP (USDbn); real GDP growth (%); GDP per capita (USD); industrial production (%); unemployment (%)
Details of the freight infrastructure in each state by segment (road, rail, air, water and pipelines). Full analysis of the competitive landscape within each segment.
Industry Trends and Developments
Analysis of the latest projects across the freight transport sector (road, rail, air, sea and logistics) including a market overview which provides an outline of the key elements driving development.
The Freight Transport market reports contain a chapter detailing the political outlook of a given region, examining the domestic politics, long-term outlook and foreign policy, and assessing the impact this could have on freight and transport businesses.
Examines the short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses.
The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Freight Transport reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.