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Asia infrastructure needs exceed $1.7 trillion per year

By Swati Deshpande,

Added 28 February 2017

Double previous estimates

• The $1.7 trillion annual climate-adjusted estimate is more than double the $750 billion ADB estimated in 2009. The inclusion of climate-related investments is a major contributing factor. An even more important factor is the continued rapid growth forecasted for the region, which generates new infrastructure demand. The inclusion of all 45 ADB member countries in developing Asia, compared to 32 in the 2009 report, and the use of 2015 prices versus 2008 prices also explain the increase.

• Currently, the region annually invests an estimated $881 billion in infrastructure (for 25 economies with adequate data, comprising 96% of the region's population). The infrastructure investment gap — the difference between investment needs and current investment levels — equals 2.4% of projected GDP (climate-adjusted) for the 5-year period from 2016 to 2020.

• The People's Republic of China (PRC) has a gap of 1.2% of GDP in the climate-adjusted scenario. Without the PRC, the gap rises to a much higher 5% of the remaining 24 economies' projected GDP. Public finance reforms could generate additional revenues estimated to bridge around 40% of the gap (or 2% of GDP) for these 24 economies. For the private sector to fill the remaining gap (3% of GDP), it would have to increase investments from about $63 billion today to as high as $250 billion a year over 2016-2020.

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