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The energy subsidy policy is used to cut the economic price of energy commodities so that people can consume these goods at a lower price than their economic price. The government will reduce the energy subsidy budget so that the APBN does not experience a deficit condition due to the number of energy subsidies that continues to swell. Apart from that, the public has also been faced with the policy of increasing the VAT rate of 11 percent in April 2022. Responding to this, this working paper will analyze the policy of increasing fuel prices and increasing VAT rates on Gross Domestic Product (GDP). The analysis is carried out using the projection method for the amount of gross domestic product which is influenced by increases in fuel prices and VAT rates as well as several macroeconomic factors that influence them.

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