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Wednesday 23.08.2017 | Name days: Valgudis, Ralfs, Vitālijs
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Bank of Latvia: transport industry is the national economy’s blood vessel

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Transport industry is important to Latvia; maybe even more important that it is in other countries. Last year, transport and storage industry formed 13% from the total added value in Latvia. Only processing (14.1%) and trading (16.9%) formed more last year, says Bank of Latvia economist Igor Kasyanov.

In 2010, transport and storage industry formed 12.1% from the total added value, while the average index across the EU was only 4.9%. The proportion of transport and storage industry in Latvia was the largest one in the EU, followed closely by Lithuania and Estonia.

Ever since the return of the crisis, transport industry has been one of the leading industries in terms of investments. Even now – in the second half of 2012 – the country is in the process of realizing several transport industry related projects. These projects will contribute to the future development of the country’s national economy. Transport industry is no longer its own segment – it is now represented as an industrial cluster along with manufacturing, trading and other industries. Investing in transport industry provides for a way for national economy to reduce costs, improve competitiveness and productivity of other general factors.

It would also be useful to note the role of transport industry in Latvia’s foreign trade. It is well known that Latvia’s foreign trade balance has been in the negative for a long time. However, transport industry gave the largest contribution for the positive growth of Latvia’s foreign trade of services. For example: in 2011, transport services made up 77.6% from the total service balance (the rest was made up of other services – financial services, tourism and business trips, IT services and construction), the economist said.

Kasyanov notes that there were 612.3 thousand cars, 72.6 thousand trucks and 5.2 thousand buses registered in Latvia by the end of 2011. Most cars, at the time, were at least 11 years old – 71.8% of all registered cars. Only 2.2% were younger than two years. A similar situation was present with trucks and buses. However, the proportion of old vehicles was significantly lower – 58.4% and 63.2% respectively.

In total, 53.9 million tons of cargo was transported in 2011. 33.9% was transported by regular transport (i.e. without additional fees) and 66.1% by commercial transport (for additional fees). Vehicles were mainly used to transport mining and quarrying industry products. This category is closely followed by agriculture products, wood and food product transport.

Latvia’s railway services transported 59.4 million tons of cargo in 2011. Only 1.2 million tons or 2.0% were transported using the country’s domestic transport (the cargo was loaded and unloaded in Latvia). 4.9 million tons (8.3%) were used in export. 48.4 million tons (81.6%) were imported to Latvia.

Russia was the main destination for export in 2011, followed by Estonia, Belarus, Kazakhstan and Lithuania. Russia was also the main source of import (73.4%). 19.3% came from Belarus; the rest – from Kazakhstan, Lithuania and other countries.

In 2011, 39.6% of the total volume of cargo that went through Riga port was made up of coal, 5.0% – chemical substances (fertilizers), 22.1% – oil products, 8.9% – cargo containers and 7.8% – wood. At Ventspils port, coal made up 23.3% of the total volume, chemical substances – 9.9%, while the largest proportion (50.8%) was still oil products.

13.3 million tons of cargo was transported by air, including mail.

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