THE IMPACT OF THE COVID-19 PANDEMIC ON INFLATION: THE CASE OF ASEAN-6 ECONOMIES

Abstract

The COVID-19 outbreak has significantly impacted the economies and financial systems of ASEAN countries, particularly the ASEAN-6. These nations are struggling with the virus’s spread and assessing its economic consequences. The pandemic has halted global
economic progress due to financial difficulties. Completing this impact assessment is crucial for revitalizing the ASEAN-6 economies and understanding the effects of the pandemic on fiscal strategies and society. This study highlights key factors such as policy rate (PR), gross domestic product (GDP), money supply (MS), and exchange rate (ER), all of which drive inflation. The empirical model utilizes a panel data regression model and uses time-series data from 2000 to 2022. Rising consumer exposure during the pandemic is linked to higher prices for goods and services in the region, contributing to inflationary pressures. A new challenge has emerged, requiring collaboration among ASEAN countries to control inflation effectively. Governments have implemented various strategies,
focusing on interest rates and monetary policies to alleviate the economic effects of COVID-19. These efforts include managing the impact on the consumer price index (CPI) to ensure economic stability and prevent excessive inflation. The pandemic has created inflationary pressures due to changes in currency rates and government policy rates. The study’s findings offer valuable insights
for the future development of financial policies in ASEAN-6 countries, helping them navigate inflation and stabilize their economies moving forward.