Sunday, February 15, 2009

My (tentative) Take on Our Fiscal Stimulus

Do we, Indonesia, after all, need a fiscal stimulus?
I am not sure, probably no.

Will our current stimulus plan give the bang for the buck?
I don't think so.

What do you think?


  1. salam kenal bang rizal,

    i can't say that i disagree with you...I believe that fiscal stimulus can't make significant effect on long run, but i think our govern didn't have any choices (in short run)...

    for example, many people suggest that our govern would be better use moneter stimulus to help us face today's crisis, but as we know our central bank BI use inflation cutting our interst rate below 8.25% sounds bad idea, moreover in the middle rupiah's depreciation...

    undergraduate student of FEUI

  2. Joseph, salam kenal juga.

    With the current fiscal stimulus design, I would say the multiplier effect is rather limited. It doesn't go to people with highest marginal propensity to consume. As for monetary stimulus, the impact would be limited, too. The slow investment and export are due to external factors, not so much weak domestic demand.

    You may want to look at latest macro data in fiskal.depkeu website. It's pretty useful to give you some sense on what is going on at macro level.

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