Tightening monetary policy, rising interest rates, the Russian invasion of Ukraine and a limited banking crisis have shifted the macro landscape to the point where a global recession is increasingly likely in 2023. Whilst the infrastructure asset class is not immune to these challenges, we expect it to remain resilient given favourable links to inflation and steady underlying demand.

Macro challenges abound

After years of expansionary monetary policy, central banks are currently walking a tightrope, fighting inflation with rapid rate rises, whilst trying to deliver a soft landing for the global economy and preventing a full-blown banking crisis. Mortgage interest rates have more than doubled in the past year in the US and UK, and European households are facing the further challenge of sharply higher utility bills as supplies of energy are curtailed.

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