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Abstract

Fiscal stimulus transmission is often hindered by banking frictions from risk-averse behavior and channel specialization. To evaluate the fiscal stimulus policy in Indonesia, this study introduces a modified Input-Output (I-O) framework integrated with bank portfolio-based shock vectors. This approach captures banking frictions by incorporating institution-specific portfolio weights into the macro-simulation framework, providing a more realistic assessment than standard uniform-transmission assumptions. Three scenarios are simulated (policy design, interim realization, and expansionary response) to assess the macroeconomic impacts of credit concentration. The results reveal a significant gap between the initial policy design and its actual realization, generating an economic opportunity loss of IDR 54.57 trillion. This output loss reflects structural transmission frictions, as realized liquidity flows disproportionately toward short-term consumptive service sectors rather than productive sectors such as manufacturing and agriculture. Conversely, the expansionary scenario targeting highly efficient banks (KBMI 4) successfully mitigates this opportunity loss and optimizes macroeconomic impacts, yielding a total output of IDR 402.07 trillion and absorbing 2.72 million workers. Beyond these empirical findings, this study establishes a framework for identifying structural leakages, enabling policymakers to anticipate and mitigate misallocation during policy implementation. This study recommends a transition from a fixed-quota system to a dynamic Risk-Adjusted Performance Allocation mechanism based on digital maturity, complemented by policies that foster real-sector supply chain development.

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Additional Files
Shock Vector and Concordance Table based on Bank Portfolios.xlsx (42 kB)
For Revision_Feb 23, 2026
Input Output Analysis.xlsx (403 kB)
For Revision_Feb 23, 2026
JBB_Authorship Statement.pdf (145 kB)
For Revision_Feb 23, 2026

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