Leading Indicators of Poverty in Indonesia: Implementation of Short-Term Outlook

Development indicators operate very dynamically in line with the government’s program and policy response. The government, therefore, needs an estimate of the poverty rate for a specific period in line with the development of its constituent indicators. The rate is required by the government to ensure the implemented policy can achieve the target according to the plan. Given the available indicators, these leading indicators are more dynamic than the poverty line so they need to be monitored earlier to estimate the poverty line in a specific period. 
This study varies from previous similar studies, where the poverty projection was made against all poverty indicators. In addition, an analysis was conducted at the national and regional (provincial, rural, and urban) levels in line with the indicators in the official publication of Statistics Indonesia (Badan Pusat Statistik: BPS). This study measures the impact of price increases on expenditure per capita, so the impact on the poverty line can be measured by observing changes in expenditure per capita. This study also formulates a method that can be replicated by policymakers by using inflation rate, economic growth, and population estimate for a specific period. This study concludes that it is very possible to apply the total inflation rate as a leading indicator to project the poverty rate if the government and other stakeholders require an alternative calculation before official figures become available. Nevertheless, the use of inflation in projecting the poverty rate is clearer than economic growth.