South Korea is expected to largely meet its infrastructure investment needs by 2040, spending $1.4 trillion on infrastructure by the year, according to a report of G20’s Global Infrastructure Hub (GI Hub).
The country is forecast to meet 97.12% of its infrastructure investment needs by 2040, lower than Japan’s 97.63%, France’s 99.45% and Germany’s 99.9% but above other developing countries such as India and Turkey, GI Hub said in a recently-published Global Infrastructure Outlook. The report covers seven industry sectors across 50 countries.
South Korea is likely to spend 2.9% of its gross domestic product on infrastructure to meet demands of a rising urban population, supported by economic growth. The percentage is 1.1 percentage points lower than the Asia region on average, but similar to Japan’s projected spending of 3.23% on infrastructure investments.
“South Korea is likely to need to invest $1.409 trillion in infrastructure by 2040, and if the current spending trend continues South Korea will invest a total of $1.368 trillion – this leaves an infrastructure investment gap of only $41 billion over a 25 year period,” it said in a press release distributed with the report.
The proportion of urban population in South Korea will likely rise from 83% in 2015 to 90% in 2040, while the country’s population is forecast to grow by only 2 million during the period.
By comparison, China has an investment need of $28 trillion and an investment shortfall of $1.9 trillion of its total investment needs. India has an investment need of $4.5 trillion and a gap of $0.5 trillion.
In aggregate, Asia needs to spend $52 trillion in infrastructure by 2040, which represents more than half of the projected global infrastructure spending needs of $97 trillion during the period.
By Daehun Kim
<Edited by Yeonhee Kim>