BMI View: We forecast most of the freight sector in Venezuela to come back to growth after two years of contraction for all freight modes. Air freight is forecast to have another year of contraction before it comes back to positive growth in 2017. Transport and infrastructure projects will be among the most vulnerable to being cut over the next year and have a negative affect on the industry overall. Cuts to both capital and current spending will be given the country ' s heavy reliance on crude to fund its budget.
Enormous external and domestic headwinds will persist for Venezuela in 2016, weighing heavily on the Venezuelan economy and prolonging a severe recession. We forecast that following estimated real GDP contractions of 2.5% in 2014 and 5.6% in 2015, the recession will stretch into its third year in 2016, when we forecast the economy will decline by 4.2%. Marginal growth thereafter will depend on the return to more orthodox economic policies under a more business-friendly National Assembly following the December legislative elections.
The continuation of OPEC's non-intervention strategy will extend a period of significant pressure on Venezuela's external accounts over the next year. While debts will rise, we maintain that the country will not default in 2016. However, Venezuela will feel the extension of the price downturn acutely, given its reliance on oil revenues to fund its current account. With crude production and exports acting as a major driver of the country's economic stability, further downside pressure on prices will exacerbate an already tenuous fiscal position within Venezuela. Although we expect that the results of the election will prod the Venezuelan government towards more centrist, orthodox economic policies, they will not be the prelude to immediate radical reforms.
Political considerations will keep key economic reforms off the government's agenda, prolonging the economic crisis and thereby only a modest return to growth in trade. In the longer term significant economic challenges will remain, particularly as we forecast structurally lower oil prices. With oil a key Venezuelan export, this will have a significant impact on government spending and also on trade growth, especially exports and therefore also the freight industry. Meanwhile, private consumption will fall as a result of the rapid erosion of purchasing power associated with the world's highest inflation, affecting imports.
Road freight will continue to dominate the freight transport sector in Venezuela, and although it will return to growth in 2016 after two years of contraction, the overall economy and decline in exports will have its impact causing growth to remain modest over the medium term. Rail freight is forecast to suffer the most as commodities and especially iron ore are facing continued contraction over the next two years. Air freight will see its third year of contraction before returning to modest growth in 2017 and until the end of our forecast period.
Headline Industry Data
Air freight volume carried in 2015 is estimated to contract by 0.9% and forecast to further contract by 0.3% in 2016.
Road freight carried in 2015 is estimated to contract by 3.5% and grow by 0.6% in 2016.
Rail freight is estimated to contract by 2.8% in 2015 and forecast to grow by 0.5% in 2016.
Maduro's Socialist P arty L ose s Historic Congress Elections
According to Venezuelan opposition leader Henrique Capriles, the opposition alliance secured a two-thirds majority in the December 6 election by winning at least 112 seats in Congress. Earlier, President Nicolas Maduro of the ruling United Socialist Party acknowledged the 'adverse results'. According to official results, as reported by the Guardian, the opposition will have at least 99 seats, more than doubling the number of the ruling party.
The Venezuela 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 Venezuela Freight Transport Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Venezuelan freight transport and logistics industry.
- Benchmark BMI's independent freight transport industry forecasts on Venezuela 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 Venezuelan freight transport sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Venezuela.
- 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.