BMI View: The outlook for the Saudi Arabian freight transport sector in 2015 is positive and we forecast robust growth across all freight modes. Rail freight in particular will perform well as the country ramps up its mineral exports, utilising newly developed freight lines like the North-South Railway. Despite the fall in the oil price through the end of 2014 we expect that the economy will continue to grow, driven in large part by private consumption. As a result, demand for containerised goods imports will be strong, boosting box throughput at container ports and intermodal volumes on the roads.
Real growth in Saudi Arabia's total trade will be steady rather than spectacular in 2015 and over our medium-term forecast period to 2019. We forecast a 3.3% expansion this year, followed by 2.7% next year, and project an average rate of 2.5% annually over the next five years. This growth will be overwhelmingly driven by a real expansion in real imports, as opposed to exports. In 2015, we forecast that imports will increase by 5.5% to exports' 1.1%.
We forecast that Saudi Arabia's road freight volumes will grow by 1.8% in 2015, making it the slowest out of the kingdom's freight transport modes in terms of its expansion rate. This is due largely to the fact that it is mode developed than the air and rail freight sector - which we expect to be the outperforming sector given its early stage of development. If our 2015 forecast is borne out, 120.44mn tonnes will be transported on the country's roads by year-end. In 2016 we forecast that growth will moderate slightly to 1.6%.
Rail freight will be the outperformer in terms of volume growth in Saudi Arabia in 2015, and over the length of our medium-term forecast period to 2019, as it benefits from massive investment. Although Saudi Arabia has had some limited rail services for some time, this has never been developed fully. Now, in common with the rest of the Gulf Cooperation Council (GCC) countries of the Arabian Peninsula, the kingdom is investing heavily in building an effective rail network. We forecast growth of 9.8% this year and 10.0% in 2016, which if realised would result in 5.18mn tonnes and 5.70mn tonnes being transported respectively in each year.
We forecast robust growth of 6.3% in Saudi Arabian air freight volumes in 2015, followed by a slight moderation to 5.2% growth in 2016. If realised this would see 1.18mn tonnes of air freight transported in the kingdom this year, following 2014's estimated 1.11mn tonnes (itself on growth of 5.0%). The freight mode will be outpaced only by the rapidly developing rail freight sector in Saudi Arabia, which we expect will achieve volume growth of 9.8% this year and 10.0% in 2016. In terms of freight tonne/km, we forecast a slower rate of growth, projecting an expansion of 4.2% this year and 3.5% in 2016.
We forecast total road freight volumes will rise by 1.8% over 2015 to reach 120.44mn tonnes.
We forecast total rail freight volumes will rise by 9.8% over 2015 to reach 5.18mn tonnes.
We forecast total air freight volumes will rise by 6.3% over 2015 to reach 1.18tonnes.
We forecast total trade value to fall by 11.8% to USD539.44bn in 2015.
The top trade partners will be China, the US, Japan, South Korea, India and Germany.