IMPACT OF FOREIGN DIRECT INVESTMENT AND INFLATION ON GDP IN NEPAL






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IMPACT OF FOREIGN DIRECT INVESTMENT AND INFLATION ON GDP IN NEPAL

ANISHA BHATTARAI

ABSTRACT
This paper examines the impact of Foreign Direct Investment and Inflation on GDP in Nepal. The data were taken from the period of 2000 to 2020 for the study. The main purpose of the study is to use the ARDL and ECM models to analyze how Foreign Direct Investment and Inflation has affected Nepal's Gross Domestic Product. Descriptive and analytical research methods were used with secondary data. Gross Domestic Product (GDP) is taken as dependent variable and FDI and Inflation are taken as independent variables. The results of the study revealed that FDI has positive and statistically significant relationship with Gross Domestic Product in the long run. Similarly, inflation has a negative and statistically insignificant relationship with Gross Domestic Product in the long run. The findings of this study revealed that increase in Foreign Direct Investment increases the Gross Domestic Product of Nepal.

Keyword: ARDL, ECM, Foreign Direct Investment, Inflation, Gross Domestic Product and Economic Growth.

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