The Effect of Zakat, Foreign Debt and Inflation Toward the Economic Growth of Indonesia Through Consumption in 2010-2019

This study aims to examine the effect of zakat, foreign debt, inflation on economic growth with consumption as an intervening variable. This research uses quantitative methods with time series data. The sample used is as much as 40 for each variable from 2010-2019. This research method uses multiple linear regression analysis. The results showed that zakat has a significant positive effect on consumption, foreign debt and inflation have a positive and insignificant effect on consumption, consumption has a significant positive effect on economic growth, zakat has a significant positive effect on economic growth, foreign debt has a negative and insignificant effect on economic growth. Inflation has a positive and insignificant effect on economic growth. Zakat has a significant positive effect on economic growth through consumption. External debt and domestic inflation have an insignificant positive effect on economic growth through consumption. Citation: Anwar, M., & Nabila, R. (2021). The Effect of Zakat, Foreign Debt and Inflation Toward the Economic Growth of Indonesia Through Consumption in 2010-2019. Journal of Economics and Regional Science, 1(1), 11-27. Abstraksi Penelitian ini bertujuan untuk meneliti pengaruh zakat, utang luar negeri, inflasi terhadap pertumbuhan ekonomi dengan konsumsi sebagai variabel intervening. Penelitian ini menggunakan metode kuantitatif dengan data time seris. Sampel yang digunakan sebannyak 40 untuk masing-masing variabel dari tahun 2010-2019. Metode penelitian ini menggunakan analisis regresi linier berganda. Hasil penelitian menunjukkan bahwa zakat berpengaruh positif signifikan terhadap konsumsi, utang luar negeri dan inflasi berpengaruh positif tidak signifikan terhadap konsumsi, konsumsi berpengaruh positif signifikan terhadap pertumbuhan ekonomi, zakat berpengaruh positif signifikan terhadap pertumbuhan ekonomi, utang luar negeri berpengaruh negatif tidak signifikan terhadap pertumbuhan ekonomi, inflasi berpengaruh positif tidak signifikan terhadap pertumbuhan ekonomi. Zakat berpengaruh positif signifikan terhadap pertumbuhan ekonomi melalui konsumsi. Utang luar dan inflasi negeri berpengaruh positif tidak signifikan terhadap pertumbuhan ekonomi melalui konsumsi. Histori Artikel: Pengajuan : 25 Februari 2021 Revisi : 03 Maret 2021 Diterima : 06 Maret 2021

GDP can be measured through three approaches, namely production, income and expenditure. It can be said that the production approach and the income approach are from the aggregate supply side, while the expenditure approach is GDP from the | 13

Malik Anwar, Rifda Nabila
The effect of zakat, foreign debt and inflation toward the economic growth of indonesia through consumption in 2010-2019 aggregate demand side. According to the production approach, GDP is the sum of the output values of all economic sectors or business fields (Tambunan, 2011).

Figure 2. Growth of GDP Indonesia 2010-2019
Source: BPS 2020 (Proccessed) Based on Figure 2, it can be seen that the economic growth of Indonesia was the highest in 2011 at 6.17% and continued to decline to its lowest point in the last ten years, namely 4.88% in 2015. After that Indonesia has been improving and its economy continues to grow and is stable until it reaches 5.17 % in 2018 and in 2019 amounted to 5.02%.
Economic growth is defined as a quantitative measure that describes the development of an economy in a certain year when compared to the previous year.
Economic growth is defined as an increase in GDP or GNI regardless of whether the increase is greater or less than the rate of population growth, and whether there is a change in structure of economy or institutional system improvement or not (Putong, 2012).
In an economy, the situation becomes the main objective, namely when the economy is targeted to achieve full employment opportunities. So every economy always expects that the level of economic growth is always significant so that the use of labor and other production factors is fully achieved (Sukirno, 2014  In addition to inflation, there is a variable of foreign debt, which has an impact on the amount of consumption by the government which tends to increase and has an impact on economic growth. Foreign debt is a portion of the total debt of a country that is obtained from creditors outside the country. Recipients of foreign debt can be governments, companies or individuals (Djohanputro, 2011  In addition to the two components above, Islamic economics offers a solution, namely the distribution of wealth through zakat. Zakat is property that must be set aside by a Muslim or a body owned by a Muslim in accordance with religious provisions to be given to those who have the right to receive it (Rozalinda et al., 2014). Zakat is distributed to those who are entitled to receive it in order to meet their daily needs. Zakat has a positive impact on the economy, because it has an impact on increasing the amount of public consumption and also on the other hand increasing the GDP of a country if it is managed properly by an institution both from the collection and distribution of the proper target. Based on Figure 6 above, the distribution of zakat funds in 2015 amounted to IDR 26,500,542,731 billion, of which in 2014 amounted to IDR 55,990,121,023 billion which was successfully distributed. After 2015, the distribution of zakat funds continued to increase in 2019, which was recorded at IDR 290,271,940,214 and it is estimated that it will continue to increase in the coming year due to the growing Muslim community to pay zakat.
The economic growth of Indonesia is still dominated by consumption carried out by the public. On the other hand, economic growth is also influenced by inflation and foreign debt, these two variables have good benefits if those can be controlled properly.
On the other hand, it also has a bad effect on the economy if the government fails to control the rate of inflation and the amount of foreign debt incurred by the State. In Islamic economics, it offers the concept of distributing wealth through zakat. Zakat is able to have a positive effect on economic growth and increase the amount of consumption made by poor families. In addition to the positive benefits of zakat, this is also supported by the majority of Indonesians Muslim.

Regression Equation 1 (Indirect)
Based on the results of multiple regression analysis between the variable of zakat, foreign debt and inflation on consumption, the following results are obtained: Source: secondary data processed, 2020

Regression Equation 2 (Direct)
Based on the results of multiple regression analysis between the variables of zakat, foreign debt and inflation on economic growth, the following results are obtained:  Source: secondary data processed, 2020 Based on the data obtained, the overall calculation of the direct effect, indirect effect and total effect is as follows:

1) Effect of Zakat Variable
The direct effect of zakat on economic growth (P1)   Source: secondary data processed, 2020 1) Zakat on economic growth through consumption (X1 on Y through Z) Based on the results of the standard error of the indirect effect coefficient above, the statistical value of the following mediation effects can be calculated: Because the value of t count 4.807317 is greater than t table (N 40) 2.02108 at alpha 0.05, it can be concluded that the mediation coefficient is significant, which means that there is a mediation effect.
2) Foreign debt to economic growth through consumption (X2 to Y through Z) Based on the results of the standard error of the indirect effect coefficient above, the statistical value of the following mediation effects can be calculated: | 21

Malik Anwar, Rifda Nabila
The effect of zakat, foreign debt and inflation toward the economic growth of indonesia through consumption in 2010-2019 Because the value of t count 0.000000 is smaller than t table (N 40) 2.02108 at alpha 0.05, it can be concluded that the mediation coefficient is not significant, which means there is no mediation effect.

3) Inflation toward economic growth through consumption (X3 toward Y through Z)
Based on the results of the standard error of the indirect effect coefficient above, the statistical value of the following mediation effects can be calculated: Because the value of t count 0.000000 is smaller than t table (N 40) 2.02108 at alpha 0.05, it can be concluded that the mediation coefficient is not significant, which means there is no mediation effect.

The Effect of Zakat on Economic Growth
Based on the results of multiple linear regression, it shows that the variable of zakat has a positive and significant effect on economic growth at alpha 5%, because it has a positive coefficient value and a probability value of 0.0000 <0.05, thus the variable of zakat has a significant effect on economic growth. This explains that the greater the value of zakat, it can increase economic growth.
Zakat funds distributed to mustahik to be productive provide an optimal income contribution, which has an impact on increasing productivity, therefore the economy increases.
The results of this study are also in line with research conducted by Anggraini et al.

The Effect of Foreign Debt on Economic Growth
Based on the results of multiple linear regression, it shows that the foreign debt variable has a negative and insignificant effect on economic growth at 5% alpha, because it has a negative coefficient value and a probability value of 0.6944> 0.05, thus the foreign debt variable has no significant effect on economic growth. This explains that the greater the value of the foreign debt, it can slow down economic growth.
Foreign debt is one option to increase State income. If the income received is large, it can also be in line with the expenditures that the government will make to carry out development activities or operational activities. However, excessive foreign debt, which is not in accordance with the ability of GDP of the State will have a negative impact in the future. Because the State will be rewarded with the amount of interest to be and the principal loan must be returned. Therefore, it will directly reduce the amount of consumption will be carried out by the country in the future (Rusydi, 2014).
The results of this study are in line with Saputra & Kesumajaya (2016) which uses the variable of foreign debt to economic growth. The results showed that foreign debt had a negative and significant effect on economic growth, which indicated a negative relationship equation. However, the research findings showed that foreign debt had a negative and insignificant effect on economic growth (H2) was rejected.

The Effect of Inflation on Economic Growth
Based on the results of multiple linear regression, it shows that the variable of inflation has a positive but insignificant effect on economic growth at alpha 5%, because it has a positive coefficient value and a probability value of 0.2685 > 0.05, thus the variable of inflation has a significant effect on economic growth. This explains that the higher the inflation rate, the higher the economic growth.
High inflation can cause people's purchasing power to fall and production costs to increase. If this happens over a long period of time it can cause the economy to become sluggish or decline. However, inflation does not always have a negative impact because controlled inflation can trigger economic growth towards the positive.
The results of this study are also reinforced by Desweni (2017)  inflation had a positive and insignificant effect (H3) was rejected.

The Effect of Zakat on Consumption
Based on the results of multiple linear regression, it shows that the variable of zakat has a positive and significant effect on consumption at alpha 5%, because it has a positive coefficient value and a probability value of 0.0000 < 0.05, thus the variable of zakat has a significant effect on consumption. This explains that the greater value of zakat, the greater amount of consumption.
Zakat funds distributed to mustahik to be productive provide optimal income contributions, which have an impact on increasing productivity so that the amount of consumption made by mustahik also increases. The results of this study were also confirmed by Nurlita & Ekawaty (2018a) who examined the effect of zakat on consumption. This research uses path analysis. The results of the research show that zakat has a positive and significant effect on consumption (H4) was accepted.

The Effect of Foreign Debt on Consumption
Based on the results of multiple linear regression, it shows that the variable of foreign debt has a positive but insignificant effect on consumption at alpha 5%, because it has a positive coefficient value and a probability value of 0.4827 > 0.05, thus the variable of foreign debt has no significant effect on consumption. This explains that the greater value of foreign debt, the greater amount of consumption.
Foreign debt is one of the Country's revenues. If the income received is large, it can also be in line with the expenditures that the government will make to carry out development activities and operational activities. Large expenditures for operations and development can be mutually beneficial for service providers and workers, therefore it able to increase the Country's per capita income.
The results of this study are supported by Isnowati (2012)

Inflation Effect on Consumption
Based on the results of multiple linear regression, it shows that the variable of inflation has a positive and significant effect on consumption at alpha 5%, because it has a positive coefficient value and a probability value of 0.8158 > 0.05, thus the inflation variable has no significant effect on consumption. This explains that the higher of inflation rate, the lower amount of consumption.
Inflation in the long term can cause a Country's economy to become sluggish and decline. However, inflation can be controlled by the government, therefore it will cause people's purchasing power to increase so that it can increase the amount of aggregate consumption of households and the government. However, if inflation cannot be controlled, it will cause an increase in the price of daily necessities to rise and cause people's purchasing power to decline.
The results of this study were also confirmed by Parsaulian (2013)

The Effect of Consumption on Economic Growth
Based on the results of multiple linear regressions, it shows that the variable of consumption has a negative and no coefficient on economic growth at alpha 5%, because it has a negative coefficient value and a probability value of 0.0000 > 0.05, thus the variable of consumption has no significant effect on economic growth. This explains that the greater consumption value, the lower of economic growth.
Consumption is one of the variables of macroeconomic affecting economic growth.
If the level of public consumption increases, the production of goods and services increases because economic growth is calculated from the number of goods and services produced.  Zakat ultimately affects the distribution of property and income towards the creation of equalitarian conditions. This condition is supported by the characteristic of zakat related to the process of distribution, zakat is distributed to people who are entitled to receive it, in the distribution of zakat it is not limited by nishab, in other words, mustahik zakat can be given zakat in a certain amount which can cover their needs according to standard of prevailing community life. In line with the increase in mustahik income, the amount of consumption will increase, this increase in consumption will have an effect on increasing the turnover of funds and simultaneously increasing economic growth.
Therefore, the hypothesis which states that the greater of zakat, the higher of economic growth through consumption (H8) is accepted.

The Effect of Foreign Debt on Economic Growth through Consumption
Based on the results of the Path Analysis, it shows that the t value of foreign debt is 0.000000 < t table 2.02108 at alpha 0.05. This explains that there is no mediating effect between foreign debt on economic growth. It is possible that there are other factors, which can mediate between the mediation between foreign debt and economic growth.
Therefore, the hypothesis which states that the greater of foreign debt, the higher of economic growth through consumption (H9) is rejected.

The Effect of Inflation on Economic Growth through Consumption
Based on the results of the Path Analysis, it shows that the t value of inflation is 0.000000 < t table 2.02108 at alpha 0.05. This explains that there is no mediating effect between inflation on economic growth. It is possible that there are other factors, which can mediate between inflation and economic growth. Therefore, the hypothesis which states that the greater of inflation, the higher of economic growth through consumption (H10) is rejected.

Malik Anwar, Rifda Nabila
The effect of zakat, foreign debt and inflation toward the economic growth of indonesia through consumption in 2010-2019 Zakat has a positive and significant effect on economi growth Foreign Debt has a positive and significant effect on economic growth Inflation has a negative and significant effect on economic growth Zakat has a positive and significant effect on consumption Foreign Debt has a positive and significant effect on consumption Inflation has a positive and significant effect on consumption Consumption has a positive and significant effect on economic growth Zakat has a positive and significant effect on economic growth through consumption Foreign Debt has a positive and significant effect on economic growth through consumption Inflation has a positive and significant effect on economic growth through consumption Accepted Rejected Rejected Accepted Rejected Rejected Accepted Accepted

Rejected Rejected
Source: secondary data processed, 2020

CONCLUSION
Based on the regression results carried out in this study, it can be seen that zakat has a positive and significant effect on consumption, the variable of foreign debt has a positive and insignificant effect on consumption, the variable of inflation has a positive and insignificant effect on consumption, the variable of consumption has a positive and significant effect on economy growth, the variable of zakat has a positive and significant effect on economic growth, the variable of foreign debt has a negative and insignificant effect on economic growth and the variable of inflation has a positive and insignificant effect on economic growth.

SUGGESTION
The suggestion that the researcher gives for further research that raises the same problem as this paper is to expand the object under study, therefore the data being studied is more and produces better conclusions.