President Nicolas Maduro's price cut on appliances poses a threat to Venezuela's port sector as shippers have already begun redirecting their shipments away from the country. We have previously forecast the country's ports of Puerto Cabello and La Guaira to experience robust growth in 2013. The government's populist measure, however, poses downside risk to our near-term forecasts.
Venezuela's shipping industry is highly impacted by the country's unstable political and economic situation. We expect economic growth to remain sluggish, characterised by a slowdown in private consumption, net exports, and investment, which will negatively impact on shipping and port volumes.
President Nicolás Maduro has consolidated his power in recent months, bolstered by a strong PSUV performance in the December 8 elections, and will continue Chávez's policies of elevated social spending, resulting in sizeable fiscal deficits. Inflation will remain elevated, at the highest level in Latin America, and the operating environment will remain very precarious for foreign multinationals in the country.
Despite the less than ideal operating environment, Venezuelan ports are seeing some foreign investment, with China Harbour Engineering Company involved in building the new container terminal at the port of Cabello, the largest in the country.
Headline Industry Data
2014 Puerto Cabello tonnage throughput growth forecast at 1.7%. Slow growth expected to continue over the medium term, averaging 2.6% over our forecast period.
2014 Puerto Cabello container throughput to grow by 3.0%, and to average 8.6% over our forecast period.
2014 Port of La Guaira tonnage throughput growth forecast at 3.0%.
2014 Port of La Guaira container throughput to grow by 2.5%.
Key Industry Trends
Concern For Importers Of Venezuela: Importers of appliances in Venezuela face concerns as companies have ordered a change of destination on goods originally set for Venezuela. Several representatives of transport...