Several Asean economies' outlooks, including Malaysia's, have been downgraded by Goldman Sachs Group Inc, with economists citing the impact from a slowing Chinese economy as a reason for the gloomier forecast.

The economists said in a report that Malaysia's gross domestic product (GDP) had been lowered to 5.1 percent year-on-year from 5.3 percent for this year, while 2014's GDP growth had been cut to 5.2 percent from 5.5 percent.

They have also cut Singapore's GDP growth forecast this year to 2.5 percent from 3 percent, pointing to “moderately tighter” financial conditions to the outlook.

Thailand's GDP forecast has been lowered to 4.6 percent from 4.8 percent this year, while next year's GDP outlook has been cut to 4.7 percent from 5 percent.

The investment bank's Hong Kong-based senior economist Li Cui had in a June 23 report downgraded China's growth to 7.5 percent from 7.8 percent for the second quarter ending June 30, and expects full-year growth of 7.4 percent for 2013 (from 7.8 percent) and 7.7 percent (from 8.4 percent) for next year.

“The recent tightening of the interbank market has sent a strong policy signal that the strong credit growth earlier in the year would likely not continue,” she said.

HSBC Holdings plc co-head of Asian economic research Frederic Neumann said in a June 25 note that Asia's growth had just downshifted to a less spectacular pace.

“Financial market volatility caused by a stronger US dollar is conspiring with local structural problems to temper the region's rapid ascent.

"What's needed to restore confidence is an all-out move towards structural reforms; above all in China, but elsewhere, too,” he said.

Neumann said volatility raised risk, as growth across most of the region had in recent years been driven by leverage.

“Bumpy financial markets render that process much harder to sustain,” he said, adding that confidence remained essential to maintain rapid, if less rampant, growth in Asia.

Neumann pointed out that with volatility on the rise, it takes a much smaller upset to knock down confidence, with unpredictable consequences for liquidity, leverage, and growth.