Relationship between foreign trade and inflation, BRICS-T countries example, panel data analysis

The aim of this study is to examine the foreign trade structures of the BRICS-T countries (Brazil, Russia, India, China, South Africa, and Turkey) between 2000 and 2023 and to assess the effects of foreign trade on inflation. In this context, it was investigated how money supply, exports and imports affect inflation. The study consists of three main sections. The first section provides a conceptual framework encompassing theoretical information on foreign trade and inflation. The second section addresses the general economic characteristics of the BRICS-T countries, and graphically presents and interprets the export-import coverage ratio and inflation data. The third section examines the effects of money supply, exports, and imports on inflation using panel data analysis. The analyses reveal that the broad money supply in the BRICS-T countries has a statistically significant and unexpected negative effect on consumer inflation. It has been commented that this situation may be due not to the decrease in the inflation rate as the money supply increases, but to the increase in the money supply as the inflation rate decreases. It has been stated that expectations and the speed of circulation of money can play a critical role in this. The effect of exports and imports on inflation was positive and significant. It has been stated that this situation may be due to the increase in the total income of exports and the increase in the exchange rates of imports. Considering that the countries subject to analysis are generally developing countries that import technology, it is recommended that these countries follow a foreign trade policy that does not create a foreign exchange bottleneck. Keywords: Inflation, Export, Import, BRICS-T, Panel Data Analysis