Global infrastructure gap requires 3.5% of GDP annually until 2035
The global economy needs to invest nearly 3.5% of GDP annually over the next decade to bridge the infrastructure gap driven by urbanization, supply chain disruptions, and digitalization.
Allianz Trade report: $4.2 trillion needed annually for global infrastructure development
The global economy requires an annual investment of nearly 3.5% of its Gross Domestic Product (GDP) over the next decade to develop its infrastructure, according to a new report by credit insurer Allianz Trade. These investments, totaling approximately $4.2 trillion USD per year, aim to address megatrends such as urbanization, supply chain disruptions, and digitalization.
The report indicates that developed economies will focus on upgrading aging infrastructure, while emerging markets face increased demand driven by urbanization and population growth. Geopolitical tensions and pandemic-related issues have also heightened the need for domestic manufacturing facilities and associated logistics infrastructure.
An estimated $26 trillion to $30.2 trillion USD will be needed for energy infrastructure by 2035, driven by the push for decarbonization and electrification. Despite a doubling of investments in renewable energy generation over the past decade, the development of essential infrastructure, like electricity grids and energy storage, has lagged.
Private capital has become crucial for global infrastructure finance, with significant growth in unlisted asset management. However, the report emphasizes that mobilizing capital alone is insufficient. Accelerating permitting processes, harmonizing regulations, and improving project execution capabilities are essential to overcome structural barriers and bridge the infrastructure gap.