Publications

- June 1, 2022: Vol. 15, Number 6

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Resilience and transition: Infrastructure outlook

by IFM Investors

Multiple disruptions are shaping the infrastructure sector, including the global net-zero focus, funding shifts driven in part by government stimulus packages, and digital transformation. Key topics investors should consider in the current environment are:

Inflation pressures will continue to build beyond 2022 and be with us for some time. Even as near-term pressures may ease (once the pandemic ends, supply-chain issues are resolved, and more restrictive monetary policy takes effect), structural forces, such as larger budget deficits and deglobalization risks, are likely to continue to exert upward pressure on inflation over the medium term. Tail risks arise: A delicate balancing act confronts central banks as they look to engineer a soft landing by raising rates to combat higher inflation. History suggests this is a difficult task, particularly for those economies or sectors that are levered. A hard landing would see rates remain low, while higher inflation wo
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