Determinant factors of gross domestic product (GDP) in Association of Southeast Asian Nations (ASEAN) member countries

Abstract

Background The gross domestic product (GDP) of Association of Southeast Asian Nations (ASEAN) member states can be used to determine their overall economic growth. In order to increase GDP, all emerging nations in Southeast Asia are stating to depend on foreign direct investment (FDI), the tourism industry, international visitors visiting ASEAN member nations banking credit, and low inflation rates. High inflation is a problem that developed and developing countries will definitely face. One of the problems faced by ASEAN member countries is that most of the member countries are in the developing country category. For ASEAN member countries, high inflation levels will encourage economic instability. GDP is less than optimal because of these classic problems in developing countries so that economic growth is not as planned. The ASEAN Economic Community (AEC), which ASEAN established, is seen as a way to reduce unemployment, alleviate poverty by boosting the travel and tourism industry and increasing investment, as well as to offer or distribute credit to businesses at low interest rates in order to boost GDP. The purpose of this study is to investigate and analyze how the GDP of ASEAN member nations is affected by FDI, foreign visitors, bank credit, and inflation. s: We analyzed panel data for seven ASEAN members from 2002 to 2020. FDI, foreign tourists, banking credit, and inflation are the research factors examined as independent variables that have an impact on GDP, the dependent variable. Results The study’s findings indicate that while inflation has a large negative impact on GDP, FDI, foreign tourism, and bank credit have a considerable positive impact on GDP. Conclusions FDI, foreign tourists, bank credit, and inflation have a significant influence on GDP in ASEAN member countries.