The Effect of Inflation, SBI Interest Rate on Foreign Investment (PMA) and Economic Growth in Indonesia (Year 2010-2019)

The economic crisis experienced by developed countries must be utilized by improving the economic structure in Indonesia to increase economic growth and increase the flow of foreign capital into Indonesia. This study aims to determine the effect of inflation and SBI interest rates on foreign investment and economic growth in Indonesia as an emerging market. The type of research used is explanatory research with a quantitative approach. This study uses 2010–2019 time series data, namely secondary data in the form of data on inflation, interest rates, FDI, and economic growth, which are tested using path analysis techniques. Statistical test results show that the inflation variable has no significant negative effect on FDI; the interest rate has no significant positive effect on FDI; inflation has no significant negative effect on economic growth; the interest rate has no significant positive effect on economic growth; and FDI has a positive and significant effect on economic growth.

The economic crisis experienced by developed countries must be utilized by improving the economic structure in Indonesia to increase economic growth and increase the flow of foreign capital into Indonesia. This study aims to determine the effect of inflation and SBI interest rates on foreign investment and economic growth in Indonesia as an emerging market. The type of research used is explanatory research with a quantitative approach. This study uses 2010-2019 time series data, namely secondary data in the form of data on inflation, interest rates, FDI, and economic growth, which are tested using path analysis techniques. Statistical test results show that the inflation variable has no significant negative effect on FDI; the interest rate has no significant positive effect on FDI; inflation has no significant negative effect on economic growth; the interest rate has no significant positive effect on economic growth; and FDI has a positive and significant effect on economic growth.

INTRODUCTION
The impact of the crisis in industrialized countries caused the world economy to experience a contraction. These problems slowed down the recovery of developed countries from the crisis. And to slow down economic growth in developing countries has different characteristics from markets in developing countries, making investmen in developing countries more profitable (Tandelilin, 2010). Foreign capital not only helps to raise capital, but also provides technical skills, experts, market knowledge, organizational experience, advanced production techniques and so on. The presence of foreign investment helps accelerate economic development in lagging countries (Jhingan, 2012).
Inflation is a monetary phenomenon in countries where inflation fluctuations cause economic turmoil. Maintaining price stability remains an important macroeconomic policy goal for most countries in the world. This is one to achieve sustainable economic growth. in monetary policy, special emphasis in placed on price stability to promote sustainable economic growth and strengthen the purchasing power of currencies (Umary dan Zubairu, 2012). Economic growth and development have different definitions, namely economic development is an effort to improve the standard of living of a nation, which is often measured by per capita income (Suparmoko, 2002).

LITERATURE REVIEW
Foreign direct investment is a form of investment through development, enterprise or acquisition. Foreign investment (PMA) is the arrangement of flows received by outsiders engaged in foreign investment (Nabilla Mardiana Pratiwi, 2004). Economic growth is an increase in the production of goods and services in the economy, which is reflected in quantitative changes (Nanga, 2005). Increased economic growth affects wealth, employment opportunities, productivity and income distribution of goods and services increases, it can also be said that the country's economy is also growing (Rahardja and Manurung, 2008).
Inflation is a general and continuous increase in the price of goods. Venieris and seblod define inflation as the tendency of the general price level to continue to increase over time (Fahmi, 2010). Inflation is an economic event that often occurs, even though it was never expected before. Inflation whenthere is a general increase in prices continuously at the same time. Price increase are not expected in the future. Under certain conditions, price increases should not be a problem because prices will return to normal, so that temporary price increases cannot be called inflation (Iba, 2012).
Interest rates are fees that are set at a certain percentage when you want to borrow money for a certain period of time. Represents bank charges for borrowing from customers. Interest rates are determined by the supply and demand of currency and determined by money makets. Changes in interest rate affect the willingness to invest (Fabozzi and Francais, 2003).

METHODOLOGY
The data used in this study is a quantitative method using secondary data. This research was conducted by looking for data originating from Central Bureau of Statistics and Bank Indonesia regarding inflation, interest rates, foreign investment and economic growth for the 2010-2019 period. The method used in this study is the path analysis method to determine the causal relationship between one dependent variable and or more dependent variables.

RESEARCH RESULT
The results of multiple linear regression to see the effect of inflation variables, interest rates on foreign investment (PMA) can be seen in the table below. The results of multiple linear regression to see the effect of inflation variables, interest rates, on economic growth through foreign investment (PMA) can be seen in the following table: The results of the study of structure 1 directly explain that the inflation variable (X₁) has a direct and significant effect on FDI (Y1) at a significant level of 0.05 when other variables are assumed to be constant. This can be shown by the coefficient -0.0580 with a probability value of t 0.903 (0.903 > 0.05). Based on the hypothesis, inflation has no significant effect on FDI.

The effect of the SBI interest rate on foreign investment (PMA)
The results of the study of structure 1 state that the interest rate (X₂) has a direct and significant effect on FDI (Y₁) at a significant limit of 0.05 if other variables are assumed to be constant. This can be proven by the magnitude of the coefficient of 0.6796 with a value of 0.448 (0.488 > 0.05). Based on the hypothesis, there is no significant influence between SBI interest rates and FDI.

The effect of inflation on economic growth
The results of structure 2 research directly prove that the inflation variable (X₁) at a significant limit of 0.05 has a direct negative and significant effect on economic growth (Y2) when other variables are assumed to be constant. This can be proven by the magnitude of the coefficient -0.0217 with a value of 0.838 (0.838 > 0.05). According to the hypothesis, inflation is not significant to economic growth. 4. The effect of the SBI interest rate on economic growth The results of the 2nd structure study show that the interest rate variable (X₂) at a significant limit of 0.05 has a direct negative and significant effect on economic growth (Y₂) when other variables are assumed to be constant. This can be proven by the magnitude of 0.1467 with a value of 0.481 (0.481 > 0.05). based on the hypothesis, the SBI interest rate has no significant effect on economic growth. 5. The effect of foreign investment (PMA) on economic growth.
The results of the 2nd structure study directly explain that the variable level of Foreign Investment (PMA) (Y₁) at a significant limit of 0.05 has a direct and significant negative effect on economic growth (Y₂) when other variables are assumed to be constant. This can be proven by the magnitude of the coefficient -0.2388 with a value of 0.028 (0.028 <0.05). The hypothesis states that Foreign Investment (PMA) has a significant effect on economic growth.  The coefficient of determination of 0.8796 indicates that 87.96% of the information in the data is explained by the model, and the remaining 0.12% is explained by errors and other variables outside the model. the coefficients in this model are relatively large, so further interpretation makes sense.

CONCLUSIONS AND RECOMMENDATIONS
1. The results of the structural equation I show that the inflation variable (X₁) has a direct and significant negative effect on foreign investment (Y₁) assuming other variables are constant with a significant limit of 0.05, explained in detail. 2. The results of the interest rate variable (X₂) have a negative and significant direct effect on foreign investment (Y₁) 3. The results of the structural equation II directly explain that the inflation variable (X₁) has a direct and significant negative effect on economic growth (Y₂) 4. The results of the study directly explain the negative and significant direct effect of the interest rate variable (X₂) on economic growth (Y₂). 5. The results of the study explain that changes in the level of foreign direct investment (Y₁) have a direct negative and significant effect on economic growth (Y₂) Based on the conclusions above, the researcher wants to provide the following suggestions: The Government and Bank Indonesia as banks central expected to be more careful when going carry out policies so that the investment climate in Indonesia is maintained and economic growth in Indonesia is getting higher.