The Booming Economy of Bali

(11/20/2011)

Bali’s strong tourism-based economy is expected drive economic growth for the island ending the year at 6.65%. But concerns persists that expectations of robust growth may be tempered by rising inflation and other deleterious factors.

Jeffry Kairupan, the head of Bank Indonesia in Bali, said interim figures for Q4 of 2012 remains strong, reliant primarily on the transportation and service sectors. Current indications are that Bali will end the year achieving growth  of between 6.16-6.65%.

According to Kairupan, Q3 2011 economic results for Bali improved slightly over Q2.

Q3 2011 also saw strong consumer demand, albeit slightly reduced from Q2. Consumers spent well in Q3, driven to do so by the high number of religious festivals and holidays. Celebrations tied to the end of the academic year were also seen to have stimulated people in Bali to go shopping.

Meanwhile, the vice-chairman of the Indonesian Chamber of Commerce (Kadin) in Bali, Dolly Sutajaya, sad that the macro-economic woes in Europe and Greece, although worrisome, have yet to had any effect in Bali.

The Chairman of the Indonesian Employers Association (Apindo) for Bali, Panudiana Kuhn, told the press that Bali’s economy continues to expand in concert with the development of the island’s infrastructure. Adding, “at this time, Bali’s economy is impeded by delayed infrastructure development, particularly as regards public facilities.”

Public facilities, such as roadways and airport are frustrating efforts to expand Bali’s economy, claimed Kuhn. He said roadways in Bali are too small and cause traffic jams. “The airport for Bali, found only in the south, is hampering the economic expansion of Bali’s north,” he explained.

Kuhn also complained that a complicated and confusing regulatory environment make it unclear who can authorize major infrastructure projects, citing problems encountered by toll ways and airport projects currently being pursued in Bali.