Economic growth across Southeast Asia will slow down as their central banks tighten monetary policies and the US Federal Reserve scales back its stimulus program, the International Monetary Fund (IMF) predicts.

In the IMF’s update to its World Economic Outlook, average 2013 economic growth for five Southeast Asian countries, including Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, is forecast at 5.6 percent this year, down from an April estimate of 5.9 percent.

“Downside risks to global growth prospects still dominate: while old risks remain, new risks have emerged, including the possibility of a longer growth slowdown in emerging market economies”, the IMF was quoted on July 9.

Key risks cited by the fund are lower potential growth, slowing credit and tighter financial conditions if the anticipated unwinding of the US monetary policy stimulus leads to “sustained capital flow reversals.”

The outlook for many commodity exporting nations has also deteriorated due to lower commodity prices.

The IMF now projects global economic growth to stand at 3.1 percent this year, down from the 3.3 percent projection made in April.-VNA