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CIO Insights Resilience versus recession 06 Infrastructure: the best is yet to come Well-functioning infrastructure is essential to economic growth, ‘green’ growth and sustainable economic transformation. The development of resilient infrastructure is one of the 17 Sustainable Development Goals (SDGs) set by the United Nations. Significant investment in infrastructure will be required around the world over the coming years and decades. Infrastructure ranges from traditional activities such as building and operating roads, bridges, railway networks, ports and airports, to developing and expanding stable energy grids and a safe drinking water supply as well as telecommunications and data networks. Businesses involved include the operators of the relevant infrastructure as well as infrastructure planners and builders. Figure 11: Infrastructure investment needed for many sectors Source: Deutsche Bank AG G20 Infrastructure Outlook. Forecasts as of April 2021. USD trillion, annual rate 5 4 3 2 1 0 2007 2010 2013 2016 2019 2022 2025 2028 2031 2034 2037 2040 Energy Telecomunication Transport airport Transport Ports Transport Rail Transport Road Water Governments worldwide are seeking to drive the expansion of their infrastructure with considerable investment. The U.S. has initiated no fewer than three major investment programmes recently. A USD1.2tn infrastructure package was passed in 2021 aimed at modernising the country’s roads, bridges, ports, airports and railways; a CHIPS and Science Act followed in 2022, which provides for total investment of USD280bn – including USD52bn in chip manufacturing. In August 2022, U.S. President Joe Biden then signed the Inflation Reduction Act, which comprises a USD430bn package of climate, social and tax measures. In Europe, the European Union launched its NextGenerationEU development fund back in 2020, now worth around EUR800bn taking inflation into account. This will be disbursed to individual member states partly in the form of loans and partly via direct grants for use primarily on climate protection and digital transformation. In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Performance refers to a nominal value based on price gains/losses and does not take into account inflation. Inflation will have a negative impact on the purchasing power of this nominal monetary value. Depending on the current level of inflation, this may lead to a real loss in value, even if the nominal performance of the investment is positive. Investments come with risk. The value of an investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk. This document was produced in December 2022. 17

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