Economic indicators are any form of statistic which has a relation with economic to measure how good is the economy so far and how good is the growth of the economy for the future, it can be like GDP, unemployment rate, inflation rate, etc. There are also three major parts in economic indicators.
1. Relation to the economic cycle:
Economic indicators could be one of these three different relationships:
a) Procyclic economic indicator is an indicator that moves in the same way or direction with the economic. So when the economic growth is good, so the numbers of this indicator also increase. The example is GDP.
b) Countercyclic economic indicator is an indicator that moves in the opposite with economic. So this is the reverse of procyclic economic indicator. Like the rate of unemployment in Indonesia.
c) Acyclic economic indicator is an indicator that has no relation with the health of economic and generally little use.
2. Frequency of the data
Frequency of the data are released in certain periods and each data has certain period to be released, such as GDP in some countries is released quarterly, and then the unemployment rate is released monthly, and in IDX the report always released in every seconds.
3. Timing
This is showing the changes time of the indicator according to the economic as a whole:
a) Leading economic indicator is always happened before the changes occurred in economic. So those, the investor always use this indicator to measure their financial asset.
b) Lagging economic indicator is an indicator which doesn’t directly change when the economic change. So this indicator can be seen three until four month after the economic changes. Like the unemployment rate.
c) Coincident economic indicator is the one which simultaneously change when the changes in economy occurred. So it is happened in the same time. For example such as Gross Domestic Product.
The Indicators also fall into seven broad categories:
a. Total Output, Income, and Spending
b. Employment, Unemployment, and Wages
c. Production and Business Activity
d. Prices
e. Money, Credit, and Security Markets
f. Federal Finance
g. International Statistics
Based from http://www.bi.go.id/web/id the statistic data show that the inflation rate in 2009 in Indonesia is already decreasing. Showed in this table.
January 2009
9.17 %
1. Relation to the economic cycle:
Economic indicators could be one of these three different relationships:
a) Procyclic economic indicator is an indicator that moves in the same way or direction with the economic. So when the economic growth is good, so the numbers of this indicator also increase. The example is GDP.
b) Countercyclic economic indicator is an indicator that moves in the opposite with economic. So this is the reverse of procyclic economic indicator. Like the rate of unemployment in Indonesia.
c) Acyclic economic indicator is an indicator that has no relation with the health of economic and generally little use.
2. Frequency of the data
Frequency of the data are released in certain periods and each data has certain period to be released, such as GDP in some countries is released quarterly, and then the unemployment rate is released monthly, and in IDX the report always released in every seconds.
3. Timing
This is showing the changes time of the indicator according to the economic as a whole:
a) Leading economic indicator is always happened before the changes occurred in economic. So those, the investor always use this indicator to measure their financial asset.
b) Lagging economic indicator is an indicator which doesn’t directly change when the economic change. So this indicator can be seen three until four month after the economic changes. Like the unemployment rate.
c) Coincident economic indicator is the one which simultaneously change when the changes in economy occurred. So it is happened in the same time. For example such as Gross Domestic Product.
The Indicators also fall into seven broad categories:
a. Total Output, Income, and Spending
b. Employment, Unemployment, and Wages
c. Production and Business Activity
d. Prices
e. Money, Credit, and Security Markets
f. Federal Finance
g. International Statistics
Based from http://www.bi.go.id/web/id the statistic data show that the inflation rate in 2009 in Indonesia is already decreasing. Showed in this table.
January 2009
9.17 %
December 2008
11.06 %
November 2008
11.68 %
October 2008
11.77 %
September 2008
12.14 %
Indonesia in September 2008 got the highest inflation rate. It is also affected by the global crisis that already happened in the world. At that time many price increased and forced the Indonesian people to spend more budget for their living cost. This situation make the people get lower income under the standardization and the number of poverty still grow up. Then in January 2009, it is become good for Indonesian people, although compare to other country it is still very high, because the inflation rate is decreasing. So that, some of the price at least cheaper than last year in September 2008. Many goods are sold in stable price nowadays, moreover the decreasing price of the gasoline in Indonesia also support the decreasing living cost for Indonesian people.
Knowing this information the Indonesian government then also reset or make the new interest rate in central bank. The government decreased the interest rate also.
4 Feb 2009
8.25%
Press release link
7 Jan 2009
8.75%
Press release link
4 Dec 2008
9.25%
Press release link
6 Nov 2008
9.50%
Press release link
7 Oct 2008
9.50%
Press release link
4 Sept 2008
9.25%
Press release link
Why the Government do this? It is to attract people saving their money in the bank. So the interest rate and the inflation rate always have a positive correlation. When inflation rate increase so the government try to increase the interest rate to devend the negative effect of inflation rate.
Another effect of inflation that probably occur in Indonesia is uncertainty. Uncertainty affect the economics to do their activities, such as the investor will be so doubtfull to invest their money and it can effect the stabilization of capital market when the uncertainty cannot be controlled. Then the worst effect of inflation rate is occurred when the domestic inflation rate become higher then Indonesia’s neghbour country because it can made the Indonesia’s currency lower. After it happened, the decreasing amount of national income also raise because goods or services in market become not competitive anymore and the demand could be lower then the income will declining also.
11.06 %
November 2008
11.68 %
October 2008
11.77 %
September 2008
12.14 %
Indonesia in September 2008 got the highest inflation rate. It is also affected by the global crisis that already happened in the world. At that time many price increased and forced the Indonesian people to spend more budget for their living cost. This situation make the people get lower income under the standardization and the number of poverty still grow up. Then in January 2009, it is become good for Indonesian people, although compare to other country it is still very high, because the inflation rate is decreasing. So that, some of the price at least cheaper than last year in September 2008. Many goods are sold in stable price nowadays, moreover the decreasing price of the gasoline in Indonesia also support the decreasing living cost for Indonesian people.
Knowing this information the Indonesian government then also reset or make the new interest rate in central bank. The government decreased the interest rate also.
4 Feb 2009
8.25%
Press release link
7 Jan 2009
8.75%
Press release link
4 Dec 2008
9.25%
Press release link
6 Nov 2008
9.50%
Press release link
7 Oct 2008
9.50%
Press release link
4 Sept 2008
9.25%
Press release link
Why the Government do this? It is to attract people saving their money in the bank. So the interest rate and the inflation rate always have a positive correlation. When inflation rate increase so the government try to increase the interest rate to devend the negative effect of inflation rate.
Another effect of inflation that probably occur in Indonesia is uncertainty. Uncertainty affect the economics to do their activities, such as the investor will be so doubtfull to invest their money and it can effect the stabilization of capital market when the uncertainty cannot be controlled. Then the worst effect of inflation rate is occurred when the domestic inflation rate become higher then Indonesia’s neghbour country because it can made the Indonesia’s currency lower. After it happened, the decreasing amount of national income also raise because goods or services in market become not competitive anymore and the demand could be lower then the income will declining also.
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