Does Inflation Matter for Zakat Collection and Distribution in Indonesia?

Abstract

Zakat plays an important role in reducing poverty and empowering communities in Indonesia. However, macroeconomic factors such as inflation may influence the performance of zakat institutions in collecting and distributing funds. While this issue is increasingly relevant, few studies have investigated the short-term and long-term effects of inflation on both zakat collection and distribution.This study explores the impact of inflation, measured by the Consumer Price Index (CPI), on zakat collection and distribution in Indonesia using monthly time-series data from January 2021 to March 2025. The data are sourced from BPS and BAZNAS. The analysis is conducted using the Autoregressive Distributed Lag (ARDL) model.The findings reveal that inflation has a significant and positive relationship with both zakat collection and distribution in both the short and long term. These results also passed normality, heteroscedasticity, serial correlation, and stability diagnostic tests, indicating that the models are robust and reliable.This research highlights the importance of considering macroeconomic conditions, particularly inflation, in designing effective zakat management strategies. It offers valuable insights for policymakers and zakat institutions in improving both the collection and distribution of zakat during economic fluctuations. Furthermore, the study contributes to the limited empirical literature linking inflation with the broader performance of zakat in Indonesia.