Article Sidebar
Views PDF: 75
Metrics
Analysis of factors affecting inflation in Vietnam during the COVID-19 pandemic
Main Article Content
Abstract
During the COVID-19 pandemic, countries have faced various economic repercussions, including high inflation rates. By employing the autoregressive distributed lag approach and autoregressive distributed lag bounds test, this study aims to estimate the impact of macroeconomic factors and the factors related to COVID-19 on inflation in Vietnam from 2020 to 2022. The results show that both in the short and long term, factors such as FDI, short-term interbank interest rates, oil price index, real exchange rate, and import prices increase the inflation rate. By contrast, freight and carriage reduce inflation. Although the industrial production index has a negative impact in the short run, this impact is insignificant in the long term. The number of deaths, on the other hand, only has a positive impact on inflation in the long run. The findings of this study provide a foundation for future research seeking to expand the scope of factors influencing inflation. Additionally, this paper proposes recommendations to control inflation in Vietnam in the context of resuming economic activities after the pandemic.
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Keywords
Inflation, COVID-19, ARDL, Vietnam
References
ADB (2022), “ADB financial report 2022”, Asian Development Bank, Available at https://www.adb.org/documents/adb-annual-report-2022 (Accessed 10 March, 2023).
Apergis, N. and Apergis, E. (2020), “Inflation expectations, volatility, and Covid-19: evidence from the US inflation swap rates”, Applied Economics Letters, Vol. 28 No. 15, pp. 1327-1331.
Armantier, O., Koşar, G., Pomerantz, R., Skandalis, D., Smith, K., Topa, G. and van der Klaauw, W. (2021), “How economic crises affect inflation beliefs: evidence from the Covid-19 pandemic”, Journal of Economic Behavior & Organization, Vol. 89, pp. 443-469.
Cologni, A. and Manera, M. (2005), “Oil prices, inflation and interest rates in a structural cointegrated VAR model for the G-7 countries”, Nota di Lavoro No. 101.2005, Fondazione Eni Enrico Mattei (FEEM), Milano.
Do, T.V.T., Dinh, H.L. and Le, T.L. (2020), “Determinants of foreign direct investment in Vietnam: ARDL model”, Journal of Trade Science, Vol. 143, pp. 11-18.
GSO (2022), Statistical Yearbook of Vietnam 2021, General Statistics Office, Vietnam.
Huynh, T.N. and Vu, T.T. (2016), “The impact of macro factors on inflation in Vietnam”, Ho Chi Minh City Open University Journal of Science – Economics and Business Administration, Vol. 11 No. 3, pp. 16-25.
Kwon, G., McFarlane, L. and Robinson, W. (2006), “Public debt, money supply, and inflation: a cross-country study and its application to Jamaica”, IMF Working Paper WP/06/121, International Monetary Fund, Washington D.C.
Leheyda, N. (2006), “Determinants of inflation in Ukraine: a cointegration approach”, in de Souza, L.V. and Lombaerde, P.D. (Eds.), The Periphery of the Euro: Monetary and Exchange Rate Policy in CIS Countries, Routledge, London, pp. 313-346.
MOF (2022), Annual Report 2021, Ministry of Finance, Vietnam.
Nguyen, K.H. and Nguyen, T.A.V. (2015), “Forecasting inflation in Vietnam using artificial neural network models”, Journal of Economic Development, Vol. 286, pp. 15-35.
Nguyen, T.L.H. and Tran, D.D. (2013), “Researching inflation in Vietnam using the SVAR method”, Journal of Development and Integration, Vol. 10 No. 20, pp. 32-38.
Nguyen, T.T.H. and Nguyen, D.T. (2010), “Macro factors determining inflation in Vietnam in the period 2000-2010: evidence and discussion”, VEPR Report, Vietnam Institute for Economics and Policy Research, Hanoi.
Ozsahin, S. and Ucler, G. (2017), “The consequences of corruption on inflation in developing countries: evidence from panel cointegration and causality tests”, Economies, Vol. 5 No. 4, 49.
Pesaran, M.H. and Shin, Y. (1999), An autoregressive distributed-lag modeling approach to cointegration analysis, in Strøm, S. (Ed.), Econometrics and Economic Theory in the 20th Century. The Ragnar Frisch Centennial Symposium, Cambridge University Press, Cambridge, pp. 371-413.
Pham, T.T.T. (2009), “Factors affecting inflation in Vietnam: nonlinear time series analysis”, Journal of Economy and Forecast Review, Vol. 12, pp. 32-38.
Pham, T.T.X., Chu, T.T.T., Nguyen, T.D., Bui, H.T. and Nguyen, T.B.N. (2020), “Application of artificial neural network to forecast inflation: a case study of Vietnam”, Journal of Finance – Marketing, Vol. 58 No. 4, pp. 54-66.
Santacreu, A.M. and LaBelle, J. (2022), “Global supply chain disruptions and inflation during the COVID-19 pandemic”, Federal Reserve Bank of St. Louis Review, Vol. 104 No. 2, pp. 78-91.
Sayek, S. (2009), “Foreign direct investment and inflation”, Southern Economic Journal, Vol. 76 No. 2, pp. 419-443.
Seiler, P. (2020), “Weighting bias and inflation in the time of COVID-19: evidence from Swiss transaction data”, Swiss Journal of Economics and Statistics, Vol. 156 No. 13, pp. 1-11.
Tufail, S. and Batool, S. (2013), “An analysis of the relationship between inflation and gold prices: evidence from Pakistan”, The Lahore Journal of Economics, Vol. 18 No. 2, pp. 1-35.
Vo, T.T., Dinh, H.M., Do, X.T., Hoang, V.T. and Pham, C.Q. (2000), “Exchange rate arrangement in Vietnam: information content and policy options”, East Asian Development Network (EADN) Individual Research Project, East Asian Development Network, Philippines.
WB (2021), World Development Report 2021, World Bank, Washington D.C.
Yuniarti, D., Rosadi, D. and Abdurakhman (2021), “Inflation of Indonesia during the COVID-19 pandemic”, Journal of Physics: Conference Series, Vol. 1821, 012039.