Capital Economics: Energy diversification is a sustainable strategy to cope with price shocks

Golden Ten Data reported on March 11 that Capital Economics stated in its report that reducing dependence on Middle Eastern energy supplies and increasing investment in domestic production, storage, and renewable energy may be the most sustainable policy options to address the current energy price shock. Gareth Leather, Senior Asia Economist at the institution, pointed out that measures to curb inflation (such as Indonesia's subsidies or South Korea's price caps) provide limited incentives for energy conservation and are costly in terms of fiscal expenditure. Countries with weaker fiscal positions may pass higher costs onto consumers, but this could drive up inflation, drag down economic growth, and increase the risk of social unrest.