Plans by the government to soon increase the price of fuel and the basic cost of electricity are predicted to threaten projected growth rates for Bali’s economy. The impact of the predicted increasse in the cost of fuel and electricity will result in a correction in the island’s economy.
The chief of the Denpasar branch of Bank Indonesia, Jeffrey Kairupan, was quoted in Bisnis Bali, saying: “Yes, the new policies (electricity and fuel costs) will precipitate a significant increase in prices if the decision to introduce these price hikes is delayed, This fact will have a significant effect generally on the Bali economy.”
According to Kairupan, Bank Indonesia has yet to calculate the exact amount they expect economic growth rates to be slowed by higher fuel and energy costs. He said the current condition is complicated further by tensions in the Straits of Hormus in the Middle East, a major pathway for the distribution of the world’s fuel supply. The Bank Indonesia official warned that if the situation in the Middle East remains unresolved, world fuel prices might increase even further.
Saying the challenges of the world economy are becoming increasingly complex, Kairupan added, “all this will have a significant effect of the development of Bali’s economy in the future.”
This year, Kariupan explained, Bali’s economy is targeted to grow between 6.2-6.6% with tourism remaining the prime driver of growth. He said tourism would remain the island’s economic backbone. “Hopefully, the European economy will not have a significant effect on the number of tourists visiting Bali.
Let’s hope the people under stress in Europe will seek Bali to refresh themselves,” said the Bank Indonesia chief.
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