ANALYSIS OF INCLUSIVE GROWTH IN INDONESIA: SUSTAINABLE DEVELOPMENT GOALS (SDGs) PERSPECTIVE

Abstract

This study examines the inclusive growth not anticipated in Indonesia in light of the SDGs. This study uses the poverty rate, Gini ratio, TPT (Open Unemployment Rate), and government expenditures on education, health, social protection, and infrastructure from 2003 to 2020 as its data sources. This topic must be investigated to accomplish the overall development objectives. The Autoregressive Distributed Lag (ARDL) regression method is applied to Klasen's Poverty-Equivalent Growth Rate (PEGR) concept to calculate the effect between government spending variables and the growth inclusiveness coefficient for each indicator. Throughout the research period, the results indicate that economic growth in Indonesia was not inclusive. In the short term, government spending on the health sector has a positive and significant effect on growth inclusiveness in reducing poverty and inequality. Government spending on the infrastructure and social protection sectors in both the short and long term has a positive and significant effect on growth inclusiveness in reducing poverty and inequality. Government spending on the infrastructure sector in the long term has a positive and significant effect on growth inclusiveness in reducing poverty and inequality. This study's findings will direct the government to increase the proportion of the budget allocated to government expenditures and closely monitor each budget allocation.