Ramayandi, Arief, and Megananda Suryana

Abstract
Growth prospects for Southeast Asia in 2014 turned out to be less than what many expected earlier in the year. The International Monetary Fund (IMF) and the Asian Development Bank (ADB) lowered the growth forecast for regional economies in their fourth quarter 2014 flagship publications by 0.2 and 0.4 percentage points respectively relative to what they had perceived earlier in the year (see Table 1). These changes imply more pessimistic perceptions about how the region’s economies will fare in terms of their growth as more data became available. As a consequence, according to ADB estimates, aggregate GDP growth for all Southeast Asian economies in 2014 moderated to 4.6 per cent relative to 5.0 per cent in 2013, marking the second consecutive slowdown in economic activities of the region. Inflation, however, is projected to be relatively stable at slightly above 4 per cent.
Despite the trend of general slowdown, there are differences in the performance of each individual country. Downward corrections for the projection of 2014 growth rate were obvious in the case of Indonesia, Philippines, Singapore and Thailand. Malaysia, on the contrary, is marked with an upward correction, an improvement in economic growth performance relative to the previous year. This paper provides a discussion on what is behind the general slowdown in growth of the region and a glimpse at the prospects going forward.
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