Economic conjuncture is the joint economic situation that a given economy shows at a given time. In other words, the current situation an economy is going through, as well as its future prospects.
The economic situation, in this sense, is the economic situation that a given economy shows at a given time as a whole.
Thus, the current situation that this economy is going through, showing what is commonly referred to as the economic outlook. The conjuncture, in other words, reflects the current state of an economy. A State that can be modified by the actions of the different socioeconomic agents, giving rise to new conjuncture scenarios.
Thus, the conjuncture is given for the socioeconomic agents, as well as the evolution of the economic variables that make up the economy. Variables such as supply, demand, interest rate, as well as other relevant variables.
Difference between economic situation and structure
Economic situation and structure are two concepts that refer to similar things, but that represent the opposite of each other. That is, economic situation and structure are the two types of situations that an economy can present. That is, when we talk about economic situations, we can say that the situation is temporary or structural, referring to the magnitude and temporality of the matter.
In this sense, the economic situation, as we have been saying, is the overall economic situation that a given economy shows at a given time. In other words, a short-term situation that shows the present scenario of a given economy.
While, on the other hand, the economic structure is the situation that an economy presents and that cannot be modified in the short term. In other words, situations that an economy presents in the long term, which must be faced over time, not presenting the temporary nature that the situation does present.
In general terms, conjuncture usually refers to a specific situation that an economy presents. While, on the other hand, structure refers to the composition of an economy in the long term.
Main indicators of the economic situation
To measure the situation that an economy is going through, there are a series of indicators that we call economic situation indicators. In this sense, these help us to control the current situation that an economy is going through, as well as to know the state of the situation.
Among the main indicators of the economic situation are:
- Price index.
- Foreign trade.
- Household consumption.
- Company orders.
Although there are many indicators of the economic situation, these are usually the most used. Some indicators that allow us to evaluate the behavior of the economy of a country in a given period, in a conjunctural scenario.
Although it is true that some of them may present temporary problems. For example, in relation to unemployment, we can talk about different types of unemployment. Among them, structural unemployment.
The effects of economic policy
As with the economic structure, the economic situation can be modifiable, mutable, before the actions of the different socioeconomic agents. In this sense, the economic situation presents a greater facility to undergo changes, since we are talking about a more fleeting scenario than, on the contrary, that presented by the economic structure. For this reason, the influence of economic policy plays a fundamental role in this matter.
Thus, economic policy, managed by politicians in a given territory, is the tool to manage the economic situation. Depending on the actions that are carried out, these will have a greater or lesser impact on the situation in a country.
Therefore, it is necessary that, when the situation is not favorable for the agents that coexist in an economy, the economic policy, well applied, tries to modify the scenario, producing a convergence towards more favorable scenarios that allow greater economic growth and further development.
Example of an economic situation
To give an example of the economic situation, the best indicator for this is employment. Employment is an indicator that suffers from great seasonality. In other words, there are conjuncture scenarios in which the employment variable behaves in one way or another.
In this sense, the tourism sector, with a high rate of temporary employment, is a sector that tends to generate employment when there are high demand peaks such as that experienced during the summer period. In this sense, the summer and the variation in employment (upward) is a good example of the situation. Well, thanks to the summer, there are increases in the hiring of personnel, as well as greater consumption.
As we have done so, Christmas is another scenario that represents a conjunctural scenario very well. Given the dates, in the month of December there are increases in the hiring of personnel, allowing that, due to the situation, the number of unemployed in the territory is reduced.