The Influence of Gross Domestic Product, Rupiah Exchange Rate, and Inflation toward Non-oil Import Value in Indonesia

Abstract

Indonesia is one of the countries with open economy. It allows Indonesia to conduct international trade. One of the Indonesia international trades is non-oil and gas imports. The total value of non-oil and gas imports in Indonesia is very high and increases from year to year. The high value of non-oil and gas imports has a positive and negative impact on the Indonesian economy. The higher non-oil and gas imports annually bring the impact of the weakening of domestic industry and agricultural sector due to the inability of price competition on foreign products. However, on the other hand, with the non-oil and gas imports, the government is able to provide goods to support the welfare of the community. This study aims to determine the effect of gross domestic product (GDP), rupiah exchange rate, and inflation on the value of non-oil imports in Indonesia in 1981–2015. The method of analysis in this study is ordinary least square. The result of data analysis shows that, simultaneously, the GDP, the exchange rate of rupiah, and inflation have a significant effect on the value of non-oil imports in Indonesia during 1981–2015. Partially, GDP, exchange rate, and inflation have a positive and significant influence on non-oil import value in Indonesia during 1981–2015.

Keywords: Non-oil; Gross Domestic Product; Exchange Rate; Inflation

Australian Academy of Accounting and Finance Review, vol 4, issue 3, July 2018, pp 137-141