Fiscal policy is a government policy relating to regulating state expenditure and revenue.
The Indonesian government implements fiscal policies with the aim of achieving economic stability, controlling inflation, increasing investment, and reducing social inequality.
One of the fiscal policy instruments that is often used by the Indonesian government is the regulation of the state budget.
In addition, the government can also use other fiscal instruments such as taxes and subsidies to influence the economy.
In 2020, the Indonesian government launched an economic stimulus program worth Rp 695.2 trillion to overcome the impact of Pandemi Covid-19.
Fiscal policy can also affect the exchange rate of the rupiah against foreign currencies.
In 2019, Indonesia succeeded in increasing its credit ranking into an investment grade by three international rating agencies, namely S&P Global Ratings, Fitch Rating, and Moodys Investors Service.
One of the challenges in implementing fiscal policies in Indonesia is the high budget deficit that can affect economic balance.
Indonesia's fiscal policy must also pay attention to aspects of environmental sustainability to support sustainable development.
The Indonesian government also encourages the development of the tourism sector through fiscal policies such as reducing income tax and exemption from import duty for the tourism sector.
