Publications

- September 1, 2022: Vol. 15, Number 8

To read this full article you need to be subscribed to Institutional Investing in Infrastructure

Inflation, recession, stagflation — Oh my! How will infrastructure perform in our new economic and market environment?

by Sheila Hopkins

Central banks everywhere seem to have finally realized the severity of inflationary developments. For quite some time, policymakers debated whether the price-rise in energy, food, transportation and housing was a blip caused by the economic bounce-back after the COVID shutdown, or whether it was longer term and more endemic. It seems evident now that those who predicted a longer-term inflationary period were correct. So, what does that mean for infrastructure investors? Is this the time for infrastructure, which has long been touted as an inflation hedge — but untested as such because we have not seen inflation in decades — to shine?

Riding the wave

Historically, returns from certain infrastructure investments have had a positive correlation to inflation, especially when they are combined with high economic growth, according to BlackRock’s Inflation and Real Assets report. And, despite fears of an impending recession — GDP fell for two consecutive quar

Forgot your username or password?