Fiscal stimulus for demand shock in Indonesia during the Covid-19 pandemic
Keywords:
Fiscal, demand, consumptionAbstract
The Covid-19 pandemic has brought about economic shocks, prompting an economic contraction. The government carried out a fiscal stimulus for the economy to survive. This study aims to examine Indonesia's fiscal stimulus policy during the Covid-19 pandemic. The research data is sourced from the Indonesian Ministry of Health, the Statistic Indonesia, the Ministry of Finance, and the Financial Services Authority. The analysis was carried out using descriptive statistics presented in tables and graphs. The comparison is made for regional growth of the expenditure component between provinces with the highest Covid-19 cases and others. The study results show that the cases of Covid-19 infection are not related to the economic contraction depth because it depends on the dominant output structure of a province. Bali was the province with the highest demand shock resulting from the tourism sector's slowdown, which triggered a decrease in derived demand, such as transportation, hotels, restaurants, and other products or services. The demand side of fiscal policy is lower than the supply side. Funds for the recovery of the tourism sector are allocated as the sector most impacted during the Covid-19 pandemic.
References
Achou, B., Boisclair, D., D’Astous, P., Fonseca, R., Glenzer, F., and Michaud, P.C. (2020). Early Impact of the COVID-19 pandemic on household finances in Quebec. Canadian Public Policy, 46(3), S217–S235. https://doi.org/10.3138/CPP.2020-087
Brinca,P., Duarte, L.J.B., and Faria-e-Castro, L.M. (2020). Is the COVID-19 Pandemic a Supply or a Demand Shock?, ECONOMIC Synopses, Number 31, https://doi.org/10.20955/es.2020.31
Czeczeli, V., Kolozsi, P. P., Kutasi, G., and Marton, Á. (2020). Economic exposure and crisis resilience in exogenous shock: The short-term economic impact of the covid-19 pandemic in the EU. Public Finance Quarterly, 65(3), 321–347. https://doi.org/10.35551/PFQ_2020_3_1
Gössling, S., Scott, D., and Hall, C.M. (2020). Pandemics, tourism and global change: a rapid assessment of COVID-19. Journal of Sustainable Tourism, 1–20. https://doi.org/10.1080/09669582.2020.1758708
Habiyaremye, A., Molewa, O., and Lekomanyane, P. (2021). Estimating Employment Gains of the Proposed Infrastructure Stimulus Plan in Post-Covid-19 South Africa. European Journal of Development Research. https://doi.org/10.1057/s41287-021-00400-5
Hassan, M. K., Rabbani, M. R., and Abdullah, M. (2021). Socioeconomic impact of COVID-19 in MENA region and the role of Islamic finance. International Journal of Islamic Economics and Finance (IJIEF), 4(1), 51-78. https://doi.org/10.18196/ijief.v4i1.1046
Ibrahim, M. M., Elkhawaga, O., and Ragab, A. (2021). Allocating fiscal stimulus during COVID-19 crisis based on sectoral linkages in Egypt for increasing growth and reducing unemployment. Journal of Humanities and Applied Social Sciences, ahead-of-print(ahead-of-print). https://doi.org/10.1108/jhass-11-2020-0190
Indonesian Financial Services Authority. Statistik Perbankan Indonesia Oktober 2020. Available online: https://www.ojk.go.id/id/kanal/perbankan/data-dan-statistik/statistik-perbankan-indonesia/Pages/Statistik-Perbankan-Indonesia---Oktober-2020.aspx (accessed on 4 March 2021).
Chongbang, N., Rawal, D. S., & Iskamto, D. (2025). Green Enterprises as a Catalyst for Strengthening Community Capacity in Local Reconstruction Efforts in Western Nepal. ADPEBI International Journal of Business and Social Science, 5(2), Article 2. https://doi.org/10.54099/aijbs.v5i2.1330
Fathimatuz, Z., Iskamto, D., & Trianasari, N. (2025). Analyzing eWOM Dimensions on TikTok and Its Impact on First-Time Voters in the 2024 Presidential Election: A Confirmatory Factor Analysis. International Journal of Digital Marketing Science, 2(1), Article 1. https://doi.org/10.54099/ijdms.v2i1.1076
Idris, F. Z., & Iskamto, D. (2025). The Influence of Social Media Marketing Features on Purchase Decisions Riverside Forest Football Club Football Club’s Jersey: Brand Trust As A Mediator. Eduvest - Journal of Universal Studies, 5(6), 6938–6951. https://doi.org/10.59188/eduvest.v5i6.51362
IIskamto, D., & Faruk, P. A. (2026). The Influence Of Social Media Influencers On Purchase Intentions Mediated By Affinity, Brand Image, Loyalty, And Trust In Erigo Products Among Tiktok Users In Indonesia. ADPEBI International Journal of Business and Social Science, 6(1), 20–34. (management). https://doi.org/10.54099/aijbs.v6i1.1807
Irawan, R., Sugiat, M. A., & Iskamto, D. (2026). Country of Origin, Brand Image, and Attitude Toward the Brand on Wuling EV Purchase Intention. Husnayain Business Review, 6(1), 1–15. https://doi.org/10.54099/hbr.v6i1.1448
Iskamto, D. (2025). Peran Mediator dan Moderator dalam Penelitian dan Implementasinya dengan Smart PLS. CV Eureka Media Aksara.
Iskamto, D., Jenita, J., Fithri, N., Ayub, A., & Hauna, F. (2026). The Role of Customer Relationship and Innovation Readiness on Marketing Behavior: The Mediating Effect of Customer Management. International Journal of Entrepreneurship and Business Management, 5(1), 17–30. https://doi.org/10.54099/ijebm.v5i1.1651
Iskamto, D., Jenita, J., Nabila, S. M., Aftanorhan, A., & Karim, K. (2025). The Influence of Reputation Perception on Customer Behavioral Intentions in Mobile Banking Adoption Based on the Technology Acceptance Model. Husnayain Business Review, 5(2), 91–106. https://doi.org/10.54099/hbr.v5i2.932
Iskamto, D., Saputra, J., Santosa, B., Jenita, Irjayanti, M., & Rahmadewi, I. (2025a). The Influence of Artificial Intelligence Technology on Repurchase Intention: Mediator Role of Consumer Satisfaction Experience. PaperASIA, 41(5b), 482–496. https://doi.org/10.59953/paperasia.v41i5b.180
Iskamto, D., Saputra, J., Santosa, B., Jenita, Irjayanti, M., & Rahmadewi, I. (2025b). The Influence of Artificial Intelligence Technology on Repurchase Intention: Mediator Role of Consumer Satisfaction Experience. PaperASIA, 41(5b), 482–496. https://doi.org/10.59953/paperasia.v41i5b.180
Iskamto, D., Tory, F. A., & Afthanorhan, A. (2025). The Influence of Social Media Marketing Activity and Electronic Word of Mouth on Lazada E-Commerce Consumer Purchasing Decisions. JPBM (Jurnal Pendidikan Bisnis Dan Manajemen), 11(1), 1–17. https://doi.org/10.17977/um003v11i12025p01
Pramono, I., Ariyanti, M., & Iskamto, D. (2025). Factors Influencing Purchase Intention To Buy Electric Motorcycles In Indonesia With Attitude As A Mediation Variable. International Journal of Science, Technology & Management, 6(1), 214–229. https://doi.org/10.46729/ijstm.v6i1.1264
Indonesian Ministry of Finance. (2020). COVID-19: Dampak, Penanganan, Pemulihan Ekonomi Nasional (PEN) & Usulan Perubahan PERPRES 54 TAHUN 2020. https://www.kemenkeu.go.id/media/15323/v922-skema-pemulihan-ekonomi-nasional_media.pdf
Khalid, U., Okafor, L. E., and Burzynska, K. (2021). Does the size of the tourism sector influence the economic policy response to the COVID-19 pandemic? Current Issues in Tourism. https://doi.org/10.1080/13683500.2021.1874311
Kim, M. J., & Lee, S. (2021). Can Stimulus Checks Boost an Economy Under Covid-19? Evidence from South Korea. International Economic Journal, 35(1). https://doi.org/10.1080/10168737.2020.1864435
Lanchimbra, C., Bonilla-Bolaños, A., and Díaz-Sánchez, J.P. (2020). The COVID-19 pandemic:: theoretical scenarios of its socioeconomic impacts in Latin America and the Caribbean. Brazilian Journal of Political Economy, 40 (4), 622-646
Liao, W. J., Kuo, N. L., and Chuang, S. H. (2021). Taiwan’s budgetary responses to COVID-19: the use of special budgets. Journal of Public Budgeting, Accounting and Financial Management, 29(6). https://doi.org/10.1108/JPBAFM-07-2020-0128
Lim, T., Phua, L.K., Teh, S.Y., and Lok, C. (2021). Effectiveness Of The Covid-19 Economic Stimulus Packages: Viewpoints From Malaysian Young Entrepreneurs. Estudios de Economia Aplicada, Volume 39(4), http://dx.doi.org/10.25115/eea.v39i4.4569.
Ranđelović, S. (2021). Determinants of volatility of economic activity in Europe during the COVID-19 pandemic: Stylized facts. Ekonomika Preduzeca, 69(3–4). https://doi.org/10.5937/ekopre2103231r
Rao, M. G. (2020). Public Finance in Pandemic Times. Journal of Asian Development Research, 1(1). https://doi.org/10.1177/2633190x211003336
Safitri, Y., Ningsih, R.D., Agustianingsih, D.P., Sukhwani, V., Kato, A., and Shaw, R. (2021). COVID-19 Impact on SDGs and the Fiscal Measures: Case of Indonesia. Int. J. Environ. Res. Public Health. 18, 2911. https://doi.org/10.3390/ ijerph18062911
Siddik, M. N. A. (2020). Economic stimulus for COVID-19 pandemic and its determinants: evidence from cross-country analysis. Heliyon, 6(12). https://doi.org/10.1016/j.heliyon.2020.e05634
Statistic Indonesia. Berita Resmi Statistik Pertumbuhan Ekonomi Indonesia Triwulan III, Jakarta, 2020. Available online: https://www.bps.go.id/website/materi_ind/materiBrsInd-20201105120056.pdf (accessed on 1 February 2021).
Statistic Indonesia. Laju Pertumbuhan PDB menurut Pengeluaran (Persen), 2020. Available online: https://www.bps.go.id/indicator/11/104/1/-seri-2010-laju-pertumbuhan-pdb-seri-2010.html (accessed on 15 February 2021).
Statistic Indonesia. Laju Pertumbuhan PDRB ADH Konstan Menurut Pengeluaran. Available online: https://www.bps.go.id/indicator/171/540/1/laju-pertumbuhan-pdrb-adh-konstan-menurut-pengeluaran-2010-100-.html (accessed on 15 February 2021).
Thakur, N., Kumar, M., and Vaishali. (2021). Stimulating economy via fiscal package: The only way out to save vulnerable Workers’ lives and livelihood in Covid-19 pandemic. Journal of Public Affairs. https://doi.org/10.1002/pa.2632
Timuno. S.O.M and Eita, J.H. (2020) Towards an effective fiscal stimulus: Evidence from Botswana, Cogent Economics & Finance, 8:1, 1790948, DOI: 10.1080/23322039.2020.1790948
Yu, K.D.S., Aviso, K.B., Santos, J.R., and Tan, R.R. (2020). The Economic Impact of Lockdowns: A Persistent Inoperability Input-Output Approach. Economies , 8, 109. https://doi.org/10.3390/economies8040109
Zhang, X., Zhang, Y., and Zhu, Y. (2021). COVID-19 Pandemic, Sustainability of Macroeconomy, and Choice of Monetary Policy Targets: A NK-DSGE Analysis Based on China. Sustainability, 13, 3362. https://doi.org/10.3390/su13063362
Downloads
Published
Issue
Section
License
Copyright (c) 2026 International Journal of Global Islamic Business
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
