ANALYSIS OF ASYMMETRIC FISCAL CONSOLIDATION POLICY TO ENCOURAGE ECONOMIC ACCELERATION
Keywords:
Fiscal consolidation, National economic acceleration, Gross Domestic Product (GDP)Abstract
The impact of handling the COVID-19 pandemic has drastically increased the realization of the 2020 state budget deficit to 6.13%, which exceeds the normal limit. This has caused a slowdown in the Indonesian economy. The government needs to mitigate risks through fiscal consolidation policies. Therefore, this research aims to find a fiscal consolidation policy that significantly impacts the acceleration of national economic growth. The analytical method employs multiple linear regression, and observation period between 1997 and 2021. The variables that used in this research are the changes in GDP for the current year (d_pdbt), the changes in Government Expenditure for the current year (d_goext), the changes in tax revenue for the current year (d_taxt), the changes in Trade Balance for the current year (d_tbt), Unemployment changes for the current year (d_umt), government expenditure in the current year (goext), Tax Revenue in the current year (taxi), and the difference in changes in tax revenue in the current year minus government expenditure in the current year (d_taxt - d_goext). Data analysis results show that two variables have a significantly positive impact on the current year's GDP changes, namely (i) d_taxt, and (ii) goext. Meanwhile, three variables exhibit significantly negative impacts: (i) d_goext, (ii) d_umt, and (iii) d_tax_d_goex)t. Additionally, two variables show insignificant impacts on economic change, namely: (i) d_tbt, and (ii) taxt..
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