The Effectiveness of Energy Subsidy Policy on the Purchasing Power of Low-Income Communities and National Economic Resilience
Keywords:
Energy Subsidies , Purchasing Power , Low-Income Communities , Fiscal Deficit , National Economic ResilienceAbstract
Purpose: This study aims to analyze the effectiveness of energy subsidy policies in increasing the purchasing power of low-income communities and to evaluate their impact on national economic resilience. Energy subsidies are considered a social protection tool, but they also have the potential to burden state finances if not managed properly.
Subjects and Methods: This research uses a quantitative approach using multiple linear regression. Secondary data includes national macroeconomic indicators such as energy subsidy levels, purchasing power, global oil prices, and the fiscal deficit relative to GDP. The analysis was conducted to examine the simultaneous relationship between these variables over a specific time period.
Results: The research results show that energy subsidies have a positive and significant impact on the purchasing power of low-income communities, reflecting the subsidies' role in maintaining consumption among vulnerable groups. However, energy subsidies also have a significant negative impact on national economic resilience by increasing the country's fiscal deficit. Furthermore, fluctuations in global oil prices exacerbate the subsidy burden and weaken the government's fiscal posture.
Conclusions: There is a trade-off between the short-term benefits of subsidies in maintaining public purchasing power and the long-term fiscal risks to national economic resilience. Therefore, a more targeted, data-driven, and adaptive reformulation of subsidy policies is needed to maintain a balance between social justice and fiscal sustainability.
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