In order to complete the first publication of Financial Social Accounting Matrix (FSAM) Indonesia 2005, Bank Indonesia in cooperation with BPS-Statistics Indonesia has published the second edition of FSAM publication in English version.

In various discourses of economic policy analyses, decision-makers are often confronted with difficult task of explaining the impacts of a certain monetary or fiscal policy on the behavior of economic agents. Accordingly, it highlights the importance of filling the research needs in this area which is currently limited. But it should be noted that such studies require accurate information regarding the transaction channel, including its transmission mechanisms to provide a comprehensive macro analysis. Therefore, it will not only enrich the analysis conducted by policymakers but also contributes, more broadly, the efforts to improve social welfare.

Based on this specific requirement for information, BI and BPS-Statistics Indonesia collaborated to establish a data system known as FSAM. It comprises of a matrix that provides comprehensive and consistent information on the interdependency between the financial and real sectors based on available statistical data. The provision of FSAM data for Indonesia corresponds to the long standing efforts taken by BI to seek information concerning monetary policy transmission to the real sector through financial transaction channels. The publication of FSAM is based on the idea to provide a data framework that can relate economic variables in the real sector to variables in the financial sector.
The FSAM framework is compiled in the form of a symmetric matrix classified into nine components, namely Production Factors, Institutions, Industrial Sectors, Trade and Transport Margins, Commodities, Capital, Indirect Taxes and Subsidies, Financial Instruments, and Rest of the World. Disaggregation of the individual components is conducted depending on analysis needs and the availability of supporting data. The resulting disaggregation is Indonesia’s FSAM 2005 framework which has 79 component dimensions.

Macroeconomic analyses can be performed based on the results of FSAM in order to describe the interdependency among economic sectors, as well as among institutions, economic variables, and financial instruments. FSAM based analysis can be conducted in three forms according to level of complexities, starting from: 1) descriptive analysis to describe the static phenomena of the economy (economic structure) in 2005; to 2) behavioral analysis to explain the impacts of a particular economic policy on various economic variables (often described as policy analysis); and 3) economic modeling and forecasting, which applies FSAM to develop economic models, for instance a model of general equilibrium.

This second edition of FSAM publication can be obtained from Directorate of Economic and Monetary Statistics, Bank Indonesia or Directorate of Expenditure Accounts, BPS-Statistics Indonesia.