Analysis of Economic Sustainability from Government Spending on The Inflation Rate in Indonesia: Effect from Intrest Rate and Money Circulation

The Indonesian government must face the challenge of inflation which has an impact on the economic slowdown. Several economic observers project that inflation will get worse in 2023. From 2010 to 2019, the Consumer Price Index (CPI) inflation has never been below three percent and continues to range from 3.5 to 8 percent. Many suspects that the increase in government spending during the 2010-2019 period has caused a decrease in inflation while an increase in interest rates has caused an increase in inflation. The purpose of this study is to examine the effect of government spending on Indonesia's inflation rate from 2010 to 2019, as influenced by interest rates and money supply.The research model is quantitative using secondary data (time series) from 2010-2019. The method used is Ordinary Least Square (OLS). The findings indicate that the BI interest rate, the money supply (M1), and government spending all have a significant effect on Indonesia's inflation rate simultaneously. The results indicate that the BI interest rate and money supply (M1) have a partially negative and significant impact on Indonesia's inflation rate from 2010 to 2019, whereas government spending has a partially positive and significant impact on Indonesia's inflation rate from 2010 to 2019.