According to Statistics Sweden’s first preliminary compilation of the National Accounts for the second quarter of this year, Swedish GDP increased by 1.2 per cent, compared with the first quarter (seasonally-adjusted). This is slightly more than the 0.9 per cent we have assumed in our report, and also slightly more than other forecasters have expected. GDP has thus increased for five quarters in a row and has recovered half of the large fall totalling 8 per cent that took place during the previous five quarters. (Figure: GDP per quarter). The picture of continued good growth is also supported by the National Institute of Economic Research’s Economic Tendency Survey, which was presented at the end of July. Although the indicator fell between June and July this year, the fall was marginal and the indicator still points to the mood among companies and households being much stronger than normal. (Figure: Economic Tendency Survey). The purchasing managers’ index in Sweden rose to 64.2 on the other hand, which can be compared with a figure of 62.4 in the previous month. It was primarily increased orders and production that contributed to the rise. (Figure: Purchasing managers’ index). Moreover, new statistics show that industrial production has continued to increase strongly, and slightly more than market expectations, while the production of services has remained at an almost unchanged level. However, industrial production is still far below the earlier peak levels. (Figure: Industrial and services production). Brighter labour market The recovery in the labour market has also continued.

The infrastructure demand in Asia is huge. ADB estimates put the overall infrastructure investment needs of Asia at $ billion per annum over the 2010–2020 period. In the meantime, there is no lack of investors interested in infrastructure investment or financing. Despite a generally longer investment cycle, infrastructure projects can offer relatively stable returns and a hedge to inflation. That is why sovereign wealth funds, insurance funds and institutional investors have shown a growing interest in infrastructure investment in recent years. However, despite this increasing interest in infrastructure investment, there are significant impediments in channeling savings into infrastructure financing in emerging Asia. Put it in the language of bankers, there is a shortage of “bankable” projects, due to lack of a credible public-private partnership (PPP) framework; deficiency in regulatory regime and legal environment for contract enforcement; lack of transparency for monitoring project implementation; and political uncertainty. The above impediments call for coordinated efforts to facilitate financial intermediation, lower barriers to investment, enhance PPP standards, and improve project governance and delivery. A number of international and regional efforts have been made on this front, including but not limited to the establishment of the Global Infrastructure Hub by G20, the launch of the Global Infrastructure Facility by World Bank, and the setting up of the new Asian Infrastructure Investment Bank focusing on promoting infrastructure development in the region.