Online - 7 April 2021: Recent announcements by many G20 members show that infrastructure spending is becoming increasingly important in economic stimulus measures as countries transition through the COVID-19 health crisis and move towards economic recovery.
The GI Hub is monitoring the infrastructure-dedicated stimulus through the InfraTracker tool – a key deliverable for the G20 Infrastructure Working Group and Italian Presidency this year.
Preliminary findings from the InfraTracker show that a total of USD2.2 trillion in infrastructure-related stimulus measures has been announced by G20 economies.
This represents over 10% of the USD14.2 trillion in total fiscal stimulus reported in the International Monetary Fund’s (IMF) Fiscal Policy Response database.
Encouragingly, a significant portion of these stimulus measures are in infrastructure with transformative elements, particularly sustainable infrastructure (37%) and investments in digital or InfraTech initiatives (24%).
Preliminary findings also show that the social infrastructure sector is attracting the largest proportion of stimulus spending, accounting for almost a quarter of total spend (23%).
But other important transformative categories are lagging in investment - new technology/R&D (12%), inclusive (11%), and resilient (7%).
While government investment in infrastructure is vitally important, and can have substantial multiplier effects, we here in this group have collectively recognised that to really make a difference, we need to increase the amount of private investment taking place.
In the last quarter of 2020, private investment in infrastructure decreased by some 40%.
Simply announcing the same things and building the same types of projects is clearly not enough to attract the levels of investment that are needed to fill the gap.
Our research has shown that ESG is increasingly important, if not one of the most important criteria for over 40% of infrastructure investors globally. It is no longer a ‘nice-to-have’, but a ‘need-to-have’ to meet investors’ internal requirements. And our work on the Quality Infrastructure Investment Survey has shown that the G20 are already on the right path, but there needs to be an increase in pace.
I strongly believe that there is now an opportunity to build on the momentum that this Presidency has started and work collectively – recognising the differences between countries – to unlock the investment and leverage market demand.
Before I finish, I would like to thank our colleagues at the IMF for their collaboration.
I’d also like to thank the teams in each of the G20 governments who are working with us to confirm data and ensure InfraTracker is an accurate reflection of the collective action this group is taking.