The aim of this study is to examine the causal relationship between foreign portfolio inflows (FPI) and economic growth of ASEAN5. We have used the data of FPI, GDP and FDI from 2001 to 2013 to determine the impact of FPI on the economy. The results of Granger causality and MWald test reveal interesting facts about the ASEAN5. The empirical analyses suggest that a significant relationship exists between FPI and the economic growth of ASEAN5, except for Singapore. The results also indicate a positive impact of FDI on economic development, in particular, for Singapore, Indonesia and Malaysia. © Fayyaz Ahmad, Muhammad Umar Draz, Su-chang Yang, 2016.