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Where Goes the Bali Economy in 2014?

Bali Economy May Slow in 2014 as Rupiah Weakens and Government Focuses on Elections

(1/12/2014) The chairman of the Bali chapter of the Indonesian Entrepreneurs Association (APINDO), Drs. Panudiana Kuhn predicts that 2014 will be a political year dominated by the legislative election on April 9th and the presidential election on July 9th.

Quoted in Bisnis Bali, Panudiana said: “Expenditures in 2014 will be largely dedicate to pay expenses related to holding the elections.”

While admitting that the economy in Bali in 2013 was relatively healthy, he warned that foreign exchange would be under threat. The value of the Indonesian Rupiah against the U.S. Dollar will continue to slacken in 2014, causing the Indonesian economy to weaken somewhat.

While State budgets will increase in 2014, the dollar and the cost of many elements of public and private spending will also increase. Citing a case in point, Panudiana mentioned the dramatic cost increase for LPG gas that took effect on January 1, 2014. “At the same time our exports are decreasing, while state-supported fuel and electrical subsidies have reached Rp. 330 trillion (US$26.4 billion). These factors can deplete foreign exchange reserves,” explained Panudiana.

Meanwhile, export figures published by the Bali Statistic Bureau (BPS-Bali) recorded exports declined 9.07% in October 2013 with total exports valued at US$47.46 million.

Handicrafts, fish and prawns, jewelry, wood-based products, ready-to-wear clothing and furniture dominate Bali exports.

Panudiana said tourism prospects for Bali remain strong in 2014, warning that security and safety are essential to sustaining Bali’s tourism industry.