<![CDATA[Conventional fiscal policy, heavily reliant on interest-bearing debt and taxation instruments, often leads to inflation, income inequality, and systemic crises. This article aims to analyze the theoretical framework of fiscal policy in an Islamic economy and its impact on macroeconomic indicators. Using a comprehensive literature review method, this article evaluates Sharia principles such as the prohibition of riba, zakat optimization, and Maqasid al-Shari'ah-based expenditure. The discussion reveals that, theoretically, Islamic fiscal policy operates as a pro-growth automatic stabilizer. Empirically and conceptually, Islamic fiscal instruments have been proven capable of driving economic growth through real-sector investment (Sukuk and Waqf), curbing inflation through equitable money circulation mechanisms, and reducing inequality (Gini Ratio) through wealth redistribution via zakat and justice-based progressive taxation.]]>
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