Abstract
This research aims to develop a Macro-Econometric Model of State Budget Posture and its Application for Impact Analysis of Fiscal and Monetary Policy. The approach used is the Macro-Econometric model, also known as the Indonesian State Budget Posture model. The time span of the data series observation is from 1990–2019. The Macro-Econometric Model which is used for APBN Posture is a system of simultaneous equations which is estimated of using two stages least squares (2SLS) method, while the solution to solve the system of equations used the Newton method. The results of the analysis show that economic growth is 2.11 percent, but under the pessimistic scenario, the contraction growth is -2.94%, while in the moderate scenario the contraction is -1.88 percent in 2020. The budget deficit in 2020 is estimated at 6.41 percent of GDP. A budget deficit of below 3 percent of GDP is expected to be achieved in 2023. For the 2020-2024 period, the primary balance is negative, which indicates that the government does not have funds to finance debt interest, so the new debt is also used to pay debt interest. It is more appropriate to finance the budget deficit from domestic sources of funds in order to avoid fluctuations in rupiah exchange rate fluctuations.
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