(EnergyAsia, March 5 2015, Thursday) — As a result of the oil price collapse, remittances by Central Asian workers in Russia will fall by an estimated total US$1.7 billion this year, said the UN Economic and Social Commission for Asia and the Pacific (ESCAP).

In a recent report, the UN unit said the near 60% plunge in crude oil prices since last June will clip a projected 1.1 percentage points off Russia’s recessed economy in 2015.

As a whole, Asia will benefit as its mostly energy-deficit economies, boosted by lower energy costs, will grow by a collective annual rate of 5.8%, up from 5.6% in 2014.

For the region’s energy-importing countries, ESCAP said every US$10 per barrel fall in the oil price in 2015 would translate into an increase in GDP growth of up to 0.5 percentage points. China, India, Japan and South Korea, which together account for over 75% of the region’s GDP, are net energy importers.

ESCAP said Asia would perform better if its member states seized the opportunity provided by lower energy cost to push through much-needed structural reforms for inclusive and sustainable development.

“Declining global oil prices are a valuable opportunity for Asia-Pacific economies to reduce fuel subsidies that account for a large share of national budgets in many countries in the region. Regressive fossil fuel subsidies more often benefit the rich and have little impact on reducing poverty. The savings from a cut in these could be better invested into more productive and inclusive development, said the report.

The UN unit noted that Asia’s economic growth remains below the levels before the 2008 financial crisis, with China’s 7% rate for 2014 its lowest since 1990.

Apart from northern and Central Asia, the region will experience higher growth this compared with 2014. ESCAP slashed 0.2% off northern Asia’s projected economic growth this year, due largely to the weak outlook for Japan.

It also reduced Central Asia’s projected growth by 1%, the result of its exposure to Russia, which accounts for almost 80% of the combined GDP of the northern and Central Asia subregion.

“Structural reforms in India and Indonesia are projected to help increase their growth to 6.4% and 5.6%, respectively, from 5.5% and 5.2%, respectively, in 2014,” said the UN unit.

With the region’s inflationary rate projected to weaken from 3.5% in 2015 from 3.9% last year, ESCAP said Asian governments have room to loosen monetary policies to support economic growth.

“Despite improved prospects many developing economies in the region face structural constraints which have kept them from realising their growth potential. Infrastructure shortages remain acute and growth has not translated into enough decent jobs,” said tes the Year-end Update, which was unveiled by UN Under-Secretary-General and ESCAP Executive Secretary Shamshad Akhtar.

ESCAP also cited the possible threat to Asia’s economies from capital volatility brought on by developed world monetary policies.