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THE IMPACT OF INFLATION AND RISING INTEREST RATES ON INFRASTRUCTURE INVESTING

July 19 2022  |  5 Minute Read 


David Walsh

Managing Director, Goldman Sachs Asset Management

David Walsh


 

Interest rates and inflation are both important variables that infrastructure investors should be cognizant of, particularly in the context of the asset class often being viewed as an inflation hedge.

 

We believe that infrastructure investors should focus on two key questions: What is the impact of rising rates on the infrastructure market? If inflation is not transitory, will infrastructure exhibit the inflation hedge characteristics that investors expect?

 

World Policy Rate & Inflation Forecasts (2021-2032E)

 

Infrastructure Investing Forecast

Source: Goldman Sachs Global Investment Research. The Policy Rate is the interest rate used by central banks as an instrument of monetary policy. Euro Area references the ECB deposit rate, US references the Federal Funds Target Rate, etc. Aggregated figures are Purchasing Power Parity(PPP)-weighted averages. For % Change YoY Inflation, aggregated figures are calculated based on seasonally adjusted numbers.

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The Impact of Inflation and Rising Interest Rates on Infrastructure Investing

 

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