ADB president says current energy crisis surpasses pandemic impact

The oil and gas shortage created by the current crisis in the Middle East is already beginning to exert significant pressure on the global economy, Asian Development Bank (ADB) President Masato Kanda stated at the ADB Insight event held within the framework of the 59th Annual Meeting of the ADB Board of Directors held in Samarkand.

"In addition, the consequences of the energy shock are expected to be long-term and will affect a wide range of sectors from industry to transportation," Masato Kanda emphasized.

According to him, unlike the COVID-19 pandemic, which caused both demand and supply shocks, the current crisis is primarily a supply shock concentrated in the energy sector. Furthermore, Kanda said the scale of the current crisis surpasses both the consequences of the pandemic and the initial phase of the conflict in Ukraine:

"The oil and gas shortage is, in a sense, an unprecedented situation in history. This is truly a terrible situation. Now the consequences are spreading to other industrial sectors as well. There is a certain time lag: it takes time for rising energy and air travel costs to be reflected in the prices of other goods. So, I think this will be a long-term situation."

The ADB president noted that an additional pressure factor is the destruction of production and transportation capacities, the restoration of which could take months and even years.