The Influence of Macroeconomics on Economic Growth in Indonesia

Abstract

Indonesia's post-COVID-19 economic growth is influenced by key macroeconomic factors—government spending, policy interest rates, and investment — analyzed using quantitative methods and descriptive-inferential approaches. Using post-2019 time series data, the study tested causality via regression to objectively measure overall impacts and identify the dominant variable. Fiscal policy supported recovery through stimulus and deficit management, monetary policy maintained liquidity through Bank Indonesia, and investment drove long-term expansion through job creation and increased production capacity. Results show the joint significance of all three variables: government spending has negative coefficients due to absorption in unproductive routine expenditures, interest rates show small positive effects signaling monetary normalization and inflation control, and investment dominates with the largest positive coefficient through technology adoption and national output growth. These findings recommend fiscal-monetary policy synergy for inclusive and sustainable growth.