Global reinsurer Swiss Re expected real GDP in emerging markets (EM) to contract by 0.5% in 2020 due to the coronavirus crisis. It forecast economic activity in EMs to expand by a compound annual growth rate (CAGR) of 4.4% in the 2021-30 period, compared to a CAGR of 5.5% in the previous decade, due to a weak global economic backdrop. It pointed out that, despite the implementation of fiscal stimuli across EMs to cushion the economic impact of the coronavirus, risks to the growth outlook are to the downside. As such, it considered that investments in infrastructure are crucial to improve productivity in EMs and increase the latter's resiliency. It considered that spending on public infrastructure has a higher multiplier effect on economic growth than other fiscal measures, such as tax cuts or direct welfare payments. It added that the COVID-19 pandemic has demonstrated the urgent need for more investment in healthcare infrastructure as well as in infrastructure that secures supply chains.
It anticipated that EMs will invest annually $2.2 trillion, or the equivalent of 3.9% of GDP, in infrastructure during the 2021-40 period, driven by economic growth, urbanization, the digitization of cities, and climate change. However, it estimated infrastructure needs in EMs at $2.7 trillion annually during the 2021-40 period, which will result in an infrastructure investment gap of $520bn annually. It expected most EM investments to be in the energy and transportation sectors. 

Swiss Re pointed out that the public sector usually finances 75% of infrastructure investments in EMs, while the private sector covers the remaining 25%. But it considered that national budgets will remain under pressure and that governments will prioritize short-term needs. As such, it anticipated that the private sector will also finance 75% of the existing infrastructure investment gap, raising the total share of the private sector to 35% of the total funding for infrastructure projects. As a result, it estimated the investment opportunities in infrastructure for the private sector in EMs at $920bn per year in the 2021-40 period. 
Source: Swiss Re