Published July 11, 2023 | Version https://www.ijassjournal.com/2023/V6I5/4146663278.pdf
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The Sustainability of Fiscal Deficits, Sharia Obligations and Government Debt, in the Indonesian Economy

Authors/Creators

  • 1. Lhokseumawe State Polytechnic, Lhokseumawe, Indonesia

Description

The fiscal deficit is the result of the government's decision to use spending, and as a consequence of receiving less than spending. In the last few years, the problem of deficit is still a challenge and the right formula has not been found to solve it. Government spending growth that exceeds state revenue growth is a strong reason to revive current fiscal policy. This paper aims to hide the relationship between the growth of debt and Sharia obligations within the framework of the Islamic fiscal deficit.State Revenue is unable to fulfill the obligation to make debt repayments. This study uses the ARDL cointegration approach to provide empirical evidence of long-term and short-term dynamics between research variables. The results of the study found that there are long-term dynamics between the research variables. Sharia obligations do not significantly affect the reduction of the fiscal deficit. However, it has a role in reducing the growth of government debt. Especially debt originating from abroad, which was caused by the depreciation of the rupiah.

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