THE SYNERGY OF FISCAL AND MONETARY POLICY FOR REAL SECTOR

Abstract

One of the causes of low growth and the real sector's contribution is economic policy, both fiscaland monetary that is lesssupportive of the economic actors in the real sector. From the fiscalside, the budget magnitudescan be seen to the realsector (e.g. Agriculture) that is less than 5percent. The funds are still skimpy that assessed itis difficult todevelop the agricultural sector.From the monetary side, the interest rate is judged still too high and cause economic actors inthe real sector is quite difficult to get capital access. This study aims to find synergies betweenfiscal and monetary policy to support the real sector. This research was using Analytical Hierarchy Process (AHP) through the distribution ofquestionnaires to respondents of SME in Surabaya. The results showedthat interest rate and capital accessto financial institutions are factorsconsidered by SME in obtaining credit (monetary policy). On the other hand, raw materials subsidies and fuel are also a major concern for them to increase production output (fiscal policy).