Effects of Inflation, Interest, and Unemployment Rates on Economic Growth: Evidence from ASEAN Countries


  • Shrikant Panigrahi
  • Noor Azizan
  • Shahryar Sorooshian
  • Prabha Thoudam


interest rates, unemployment, inflation, economic growth, ASEAN countries


The long-run relationship between interest, unemployment and inflation rates and economic growth in ASEAN countries has been neglected for decades. Such a disregard is surprising because these macroeconomic factors affect capital and investment costs. Using secondary panel data gathered from the World Bank database, we investigate the long-run relationship between these factors and GDP growth from 1995 to 2018 in ASEAN-5 countries (Malaysia, Indonesia, Thailand, Singapore and the Philippines). Statistical results show a strong dynamic long-run linkage between interest and inflation rates and economic growth, but the linkage between unemployment rate and economic growth is insignificant. Granger’s test of causality indicates that interest, unemployment and inflation rates and economic growth are related. Policy makers should be aware of these relationships when making decisions to facilitate economic growth and stability.