News Room - Business/Economics

Posted on 28 Jan 2008

Emerging markets spending to reach USD 21.7 trillion - Morgan Stanley

According to a Morgan Stanley research report, infrastructure spending across emerging markets is expected to reach USD 21.7 trillion over the next decade, with Asia representing 67% of the total and the Middle East representing 4%.

As per report, China and India are expected to dominate this spending with 43% and 13% of total forecast emerging market infrastructure spending, respectively, for the next 10 years. Russia makes up 10% of the next 10 year's infrastructure spending with Brazil representing 5% and South Africa 1%, alongside the Middle East's 4%.

One of the key findings from the research is that infrastructure funding is plentiful in most countries, particularly in China and the Middle East, from public and private sector firms. The constraints on delivery are in the availability of contractor services and other human resource and machinery limitations in certain countries.

The report also looked closely at 4 industries of materials, industrials, financials and utilities and examined 15 sectors including construction and engineering, roads and rail, transportation infrastructure and real estate management and development. It showed that the number of infrastructure stocks has risen from 87 to 152 over the last 5 years up by 75% and over the same time, the number of developed market infrastructure stocks has risen by only 12%.

Morgan Stanley said that sovereign wealth funds will also play an important role in funding infrastructure investment cross border between emerging market countries as well as via investment in local financial institutions or directly in projects in certain cases.