The impact of inflation on economic growth

This study investigated the correlation between inflation and economic growth in ASEAN-5 countries from 1990 to 2020. The main objective of this study is to explore the causal connection between inflation and economic growth. The results demonstrate variations in the relationship between economic growth and inflation in these countries. Of the five ASEAN countries, we found that inflation hurts economic growth in the Philippines and Indonesia, but not Singapore. This research revealed a stationary economic growth series in all countries except for the Philippines. The inflation rates were found to be stationary for all ASEAN-5 countries. Furthermore, Granger causality tests suggested either a feedback or one-way causal relationship between economic growth and inflation in all countries except Malaysia. Our panel estimation also provides interesting findings that complement time-series analysis. Our findings shed light on the complexities of the inflation-economic growth relationship within ASEAN-5 countries and contribute to a better understanding of their economic dynamics in the age of digitalisation.