https://arab.news/j72ft
Energy systems across ASEAN+3 (the Association of Southeast Asian Nations, plus China, Japan and South Korea) are under increasing strain. Climate shocks are threatening infrastructure and supply. The rapid expansion of artificial intelligence and digital infrastructure is driving a surge in electricity demand. And geopolitical tensions are adding new volatility to global energy markets.
Although the region is more resilient to energy shocks than in the past, these forces are creating new challenges for macroeconomic stability. Climate change is no longer only an environmental issue. It is increasingly testing energy systems — including power generation, fuel supply chains and electricity networks — with far-reaching effects on the broader economy.
Globally, natural disasters caused around $320 billion in economic losses in 2024, with the Asia-Pacific region among the most affected. In Southeast Asia, floods and typhoons regularly disrupt food production, supply chains and infrastructure, including power systems and fuel transport networks that are critical to energy supply.
Such disruptions can spread quickly through the real economy. Damage to energy infrastructure can interrupt electricity supply and raise costs, while floods often push up food prices and disrupt logistics. Reconstruction then increases fiscal expenditures, while losses to businesses weaken balance sheets and increase credit risks for banks and insurers.
