1. Asistensi PI Pertemuan 1 Pengantar Perekonomian Indonesia Jahen Fachrul Rezki [email_address]
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6. Indicators of Economic Development, 1960-65 Source: Report of Bank Indonesia for the Financial Years 1960-65 (1967) 1960 1961 1962 1963 1964 1065 1 NDP (Rp Billion, 1960 prices) 391 407 403 396 407 430 2 Per capita income, % change -1.6 1.7 -3.0 -4.0 0.3 3.2 3 Money Supply (M1): % Increase 37 41 101 94 156 302 4 % Increase due to budget deficit 19 134 97 115 104 90 5 Budget Deficit as % of expenditure 17 30 39 51 58 63 6 Inflation (CPI, % Increase) 20 95 156 129 135 594
7. Indonesia – Then and Now Source: World Bank Indicators Mid-1960s Early 1990s Real GDP per capita (1965) (1991) Growh (approximately, %) 0 5 $1991 190 610 Shares of GDP (1961) (1990) Agriculture 53 19 Industry 11 40 Manufacturing 8 21 Employment: % in Agriculture 73% (1961) 50% (1990) Industry: % of food and rubber produce in total manufaturing 60 (1963) 12 (1986) Investment: Gross domestic investment as %of GDP 8 35 Monetary Conditions Inflation (% of Increase) >500 5-10 Broad money/GDP (%) 7 46
An example of this was during the late 1980s with the so-called "Lawson Boom". There was a sharp rise in the demand for credit and a sharp rise in house prices. The amount of money in circulation grew at alarming rates and caused excess demand in the economy. By the autumn of 1990, retail price inflation had climbed to 10.9%. A recession was needed to bring it back down again.