Universitas Gadjah Mada
Faculty of Economics and Business

The increase in the election budget raises hopes for the country's economic impact. UGM Faculty of Economics and Business (FEB) lecturer Rijadh Djatu Winardi, S.E., M.Sc., PhD, CFE UGM, said the budget used in the election was quite large. However, the effect of campaign and election funds on Gross Domestic Income (GDP) remains limited.

"The effect ranges between 0.1-0.2 per cent of GDP," he explained at the Bulaksumur Corner event, which took place at the UGM Central Building recently.

The Department of Accounting lecturer explained that the wider community did not feel the impact of election funds. The reason is that people are still under pressure from inflation or rising prices of goods and services.

"There are also those who explain that the current effect will not be as big as the previous election," he said.

This condition occurred because several presidential candidate pairs did not outsource their funds but used their own companies. For example, for making banners, t-shirts and other campaign attributes.

He also highlighted a similar pattern in the implementation of elections in Indonesia. In every election, there is always an increase in institutional consumption and a decrease in investment. Even though there was an increase, it was more for Household Non-Profit Institutions (LNPRT). Consumption for making campaign attributes such as banners and billboards is still a mainstay for increasing economic growth.

"Economic growth during the election was still limited, and the impact was only focused on the LNPRT," he explained.

Meanwhile, on the other hand, investment flows are being held back. In every election, Rijadh said that investment figures in the country did not increase.

"Entrepreneurs always try to wait and see. "They hope the election will end soon so they can be more certain and invest immediately," he explained.

Reportase: Kurnia Ekaptiningrum