The Effect Of Inflation, FDI, Exchange Rate, and Governance Quality on GDP in Five ASEAN Countries

Abstract

This study aims to analyze the influence of inflation, Foreign Direct Investment (FDI), exchange rate, political stability, rule of law, and control of corruption on national income in five ASEAN countries from 2010 to 2023. In this research, panel data is used to examine the impact of these variables on GDP in the five ASEAN countries. The analytical method employed is panel regression with a Fixed Effects Model (FEM) approach. The data used are sourced from the World Development Indicators of the World Bank. The results show that inflation has a negative effect on GDP, while Foreign Direct Investment (FDI) and the exchange rate have a positive effect on GDP in ASEAN countries. However, political stability and rule of law do not have a significant effect on GDP. Meanwhile, control of corruption has a negative effect on GDP.