Senior Analyst at the Indonesia Strategic and Economic Action Institution, Ronny P Sasmita, assesses that the contribution of regional head elections (Pilkada) or simultaneous Pilkada to economic growth is not very significant.
“From a fiscal perspective, the allocation of simultaneous regional election spending has some contribution (to economic growth), but it is not very significant,” he said.
The Ministry of Finance has allocated funds for the simultaneous regional elections amounting to Rp 37.52 trillion. The funds are disbursed through the Regional Grant Agreement. (NPHD).
Ronny said, on the other hand, the simultaneous regional elections do indeed drive consumption, especially from political parties. This is in line with campaign activities, the production of election attributes, and others. “The regional elections impact both the formal and informal economy.” “It has both long-term and short-term impacts,” he said.
Along with the implementation of the regional elections, Ronny stated that economic growth will increase in the fourth quarter of 2024, but its contribution will not be significant. However, consumption spending from non-government sources will increase.
“Government spending and investment will contribute significantly in the fourth quarter of 2024. Economic growth in the fourth quarter of 2024 could reach 5.1 to 5.2 percent,” he said.
However, the implementation of regional elections, according to Ronny, will have a significant impact on the regional economy. “The local community appears enthusiastic. In the regions, there are campaigns, and the euphoria of the regional elections is quite significant,” he said.
Ronny added that the Christmas 2024 and New Year 2025 moments will also not contribute significantly. This is because people will hold back on spending as their income does not increase. “(Christmas-New Year) will not have a significant impact. Frugal living will make people resist shopping and not go overboard,” he said.
Leave a Reply