Do Zakat and Price Stability Matter for Poverty Reduction in Indonesia?

This study explores the contribution of zakat and price stability to poverty reduction in Indonesia from January 2011 to June 2021. Specifically, this study empirically explores the short-term and long-term relationships between zakat, gold prices, exchange rates, oil prices, and poverty in Indonesia. Using the Vector Error Correction Model (VECM), this study recorded that zakat and gold price stability contribute to short- and long-term poverty reduction. On the other hand, the stability of exchange rates and oil prices have reduced poverty in the long-term. These findings suggest the Indonesian government's importance in enhancing zakat management by implementing good zakat governance principles and ensuring prices of gold, oil, and exchange rate stability through proper macroeconomic policies to alleviate poverty.