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Latvia Q1 2013
The port of Riga is set to hold the top position in Latvia's maritime sector in terms of both total tonnage and
container throughput in 2013, after another year of healthy growth in 2012.
Riga has a strong position to build on in 2013, enhanced by robust year-on-year (y-o-y) growth in total
throughput and a double-digit increase in box volumes in 2012.
Over the medium term, we project further throughput growth at the port of Riga. Ventspils, the country's
second largest port in terms of the total throughput, continued its recovery in 2012 and reached tonnage
levels comparable to the ones it had before the downturn.
Headline Industry Data
? Port of Riga tonnage throughput forecast to grow 2.9% in 2013; over the medium term (2013-2017), we
project a 14% increase.
? Port of Liepaja container throughput forecast to grow 8.6% in 2013; over the medium term (2013-2017),
we project a 45% increase.
? 2013 total trade growth forecast stands at 3.3%.
Key Industry Trends
Belarus' mulling of redirecting its shipments via Russian ports rather than the Baltic states' ports will be a
major blow for ports in Latvia and Lithuania, specifically the ports of Riga and Klaipeda. If Belarus moves
forward with this plan, it will place downward pressure on our forecasts for Baltic states' ports, because
although the positive domestic outlook of these states has been a major growth driver, the facilities have
been positioning themselves as gateways for trade in and out of the high-growth regions of the
Commonwealth of Independent States (CIS). A redirection of freight via Russian ports would benefit the
ports of Kaliningrad, St Petersburg and Ust-Luga in particular, highlighting a trend we have noted in the
freight transport sector of Belarus and Russia moving closer together.
Risks to Outlook
The base for growth at Latvia's ports stems from BMI's positive outlook for the country's economy, with
real GDP growth estimated to come in at 4.2% for 2012 and 3.9% growth anticipated for 2013. Our positive
medium-term forecast for Latvia's ports' throughput also holds upside risks, with Latvia getting better
connected, displaying a solid domestic demand outlook and developing its role as a gateway for cargo to
and from Russia and Central Asia. This upside risk is further enhanced by Russia's membership of the
World Trade Organization, on the back of which Latvian ports expect to tranship more of its neighbour's
imports and exports.
The main risk to our forecasts for Latvia remains the persistent eurozone sovereign debt crisis. A further
deepening of the crisis would pose downside risks to most of our forecasts for Latvia's economy and our
port throughput projections.
Russia's development of the Ust-Luga port near St Petersburg, as it seeks to handle a larger percentage of its
own trade needs, creates another downside risk to our forecasts as it is set to place downward pressure on
Baltic states' port throughput.
The possible redirection of Belarus' cargo to Russian ports adds one more downside risk to our forecasts.
However, the investment that Russian firms continue to make into Baltic states' ports in an effort to
diversify away from an over-reliance on liquid bulk creates an upside risk.