The Effect of Economic Growth, Imports and Exports on Food Inflation in ASEAN Countries: Case Study of Timor Leste, Laos, Cambodia, and Myanmar

Abstract

This study aims to evaluate the effect of economic growth, imports and exports on food inflation in four ASEAN countries, namely Timor Leste, Laos, Cambodia and Myanmar, over the period 2003 to 2024. This study fills a gap in the literature that rarely explores the simultaneous interaction between these variables in the context of food inflation in ASEAN countries with high inflation rates. The method used in this study is panel data analysis with Fixed Effect model. This model was chosen after a series of statistical tests, including the Chow test and Hausman test, which showed that the Fixed Effect model is more suitable for handling cross-country variation and overcoming potential heteroscedasticity and multicollinearity problems. The results show that economic growth has a significant negative effect on food inflation, while import and export variables show no statistically significant effect. These findings highlight the importance of policies that support domestic economic growth as a way to control food inflation. The main contribution of this study is the provision of new insights into how macroeconomic factors such as economic growth, imports and exports affect food inflation in ASEAN countries. The results are expected to serve as a reference for policymakers in formulating more effective economic strategies to address food inflation challenges in the region.