Fiscal Policy Dynamics and Public Consumption: Accelerating Economic Growth in South Sulawesi

A Nur Fitrianti

doi:10.55927/fintech.v4i1.188

Authors

A Nur Fitrianti Universitas Muhammadiyah Makassar

DOI:

https://doi.org/10.55927/fintech.v4i1.188

Keywords:

Fiscal Policy, Government Spending, Tax Revenue, Household Consumption, Economic Growth

Abstract

This study aims to analyze the dynamics of fiscal policy through government spending and tax revenue in accelerating economic growth in South Sulawesi Province, with household consumption as a mediating variable. The research approach used is quantitative with a causal associative design. The data used are panel data from 24 regencies and cities in South Sulawesi over the past ten years, analyzed using path analysis. The results show that both government spending and tax revenue have a positive and significant influence on household consumption and regional economic growth. The most important finding of this study reveals that household consumption plays a significant mediator in channeling the impact of fiscal policy towards strengthening Gross Regional Domestic Product (GRDP). This indicates that the effectiveness of government intervention in spurring economic growth depends heavily on its ability to stimulate public purchasing power. Therefore, local governments are advised to optimize spending in productive sectors and maintain price stability to strengthen household consumption as the primary driver of the regional economy.

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