Asian Development Outlook 2015 forecasts that the 6.3% rate of gross domestic product (GDP) expansion achieved in 2014 will continue into 2015 and 2016.

The drop in international oil prices is taking pressure off of consumer prices. Inflation will slow from 3.1% in 2014 to 2.6% in 2015.

As low oil prices are supporting growth in developing Asia, a sudden sharp reversal could undermine the outlook and require policy response. Similarly, while capital inflows to the region have been beneficial for growth, policy makers must carefully manage credit expansion to ensure that it does not lead to excessive leverage and asset price bubbles.

Afghanistan

Rivals in the disputed presidential election in June 2014 finally agreed in September to form a unity government. The political crisis and the withdrawal of international security forces undermined confidence and the economy. The outlook is for modest recovery helped by large inflows of development assistance and security grants. The new government has energetically sought to improve governance, shore up public finances, and enlist regional cooperation to improve security.

Kazakhstan

Adverse external factors caused growth to slow to 4.3% in 2014 from 6.0% a year earlier, but currency devaluation in February 2014 strengthened budget revenues and the current account balance while adding to inflation. Growth is projected to slow further to 1.9% in 2015 before recovering to 3.8% in 2016. Inflation should ease, but weak oil prices will turn the current account into small deficits in both years.

Kyrgyz Republic

Growth slowed to 3.6% in 2014 as the economies of the Russian Federation and Kazakhstan weakened, while local currency depreciation of about 19% pushed inflation to 7.5%. With economic contraction expected in the Russian Federation, growth will likely slow further to 1.7% in 2015 before recovering slightly to 2.0% in 2016 as the external environment shows some improvement. Inflation will likely reach or exceed 10%, and the current account deficit 15% of GDP.

Tajikistan

Declines in remittances and the traditional exports of aluminium and cotton slowed growth to 6.7% in 2014 from 7.4% a year earlier. Inflation worsened to 6.1%, and the current account deficit to 7.9% of GDP. Expansion will likely slow further to 4.0% in 2015 before recovering to 4.8% in 2016. Inflation will accelerate to 10.0% in 2015 with currency depreciation before easing to 6.5%. The current account deficit should narrow to 5.9% in 2015 and 4.8% in 2016.

Turkmenistan

High growth at 10.3% in 2014 reflected robust public investment and gas exports. Strong foreign direct investment nevertheless drove the current account to a deficit of 4.4% of GDP. Growth is projected to slow to 9.7% in 2015 and 9.2% in 2016, and the current account deficit to widen further to 8.4% of GDP before moderating to 6.2% in 2016. Inflation is forecast to reach 7.0% before subsiding to 6.5%.

Uzbekistan

Growth rose marginally to 8.1% as increased lending and public outlays offset the impact of a weakening economy in the Russian Federation. Recession there and sluggish external demand are projected to slow growth to 7.0% in 2015 before it edges back up to 7.2% in 2016 as the external outlook improves. Inflation is projected to reach 9.5% in 2015 and 10.0% in 2016, with the current account showing surpluses of 0.9% and then 1.1% of GDP.