The Impact of Fiscal Policy on the Indonesian Economy: Economic Growth, Price Stability and Income Distribution

Abstract

Fiscal policy is one of the main instruments used by the government to manage the economy. This study aims to analyze the impact of fiscal policy on the Indonesian economy, focusing on economic growth, price stability, and income distribution. The research method used is a literature study by collecting secondary data from various sources such as journals, books, scientific articles, and official reports. The results show that fiscal policy has a significant impact on economic growth, where taxes, goods spending, and subsidies have a positive correlation, while foreign debt and personnel spending have a negative correlation. In addition, fiscal policy also plays a role in controlling inflation and maintaining price stability through the regulation of state expenditure and revenue. Income distribution and improving people's welfare are also important focuses of fiscal policy. This study provides a comprehensive insight into the role of fiscal policy in the Indonesian economy and provides policy recommendations that can be implemented to achieve the desired economic goals.