Czech Republic Freight Transport Report Q4 2009

We forecast that total freight carried across all modes, measured in mntkm, will rise by an annual average of 2.2% per annum in 2009-2013. However, the sector is expected to suffer in the short-term. The national airline CSA reported another loss in Q109 and its purchase price is now standing at around CZK3bn (US$157.6mn), down from an estimated CZK5bn (US$262.3mn) only a few months ago. This was actually viewed as a low price for the Czech Republic's flagship carrier. However, it is a reflection of the times. In 2008, Prague Airport reported a 13% drop in freight and mail volumes.

On a positive note, in May 2009 the Czech Chamber of Deputies (lower house of parliament) voted in favour of a package of measures to mitigate the impact of the global recession currently battering the Czech Republic. New policies include introducing a car-scrapping subsidy to stimulate automotive demand and cuts in companies' social tax payments to reduce their employment costs. It is estimated that the package will cost CZK40.00bn (EUR1.41bn) and should boost the freight sector, which is sensitive to the country's manufacturing output and trade volumes. According to latest estimates, transport and communications GDP rose by 4.1% in 2008, 0.9pps ahead of overall GDP, which we estimate to have increased by 3.2%. In 2009, we expect the value of transport and communications GDP to sink by 3% before returning to marginal growth in 2010. By 2013, the total value of the sector will reach US$29.8bn.The transport and communications sector employed 373,000 people, or 7.8% of the labour force, in 2008. We see that figure staying broadly constant up to 2013.

Until 2009, the Czech freight transport industry had been growing steadily during the first years of the 21st century. Despite the recession in 2009, BMI's forecasts of the Czech Republic's freight transport industry are still positive for all sectors. This outlook is based on the effects of the country's membership of the EU and its efforts to harmonise with the EU transport system, coupled with a stable economy. The government's 10-year transport plan should benefit both freight and passenger transport in the long term through the modernisation and improvement of the roads, railways and airports.

Oil shipped by pipeline should grow at around 2.1% per annum, also ahead of GDP. However, we believe rail freight carried fell slightly in recent years; the average growth for 2009-2013 will come out at a more modest 1.6% per annum. Freight carried by inland waterways will grow slowly at 0.9% per annum. We expect airfreight to grow at the most rapid pace, although it is starting from a low base. Airfreight carried will rise by 3.3% each year on average in 2009-2013.