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Storm Clouds Ahead for Baliís Economy

Noted Bali Economist Gusti Viraguna Bagoes Oka Urges Caution in 2013

(1/4/2013) Bisnis Bali reports that despite a general air of optimism in 2013 regarding Bali’s economy, some genuine areas of genuine concern persist.

I Gusti Viraguna Bagoes Oka, a local economic observer, said on Sunday, December 30, 2012, that political tensions, increases in the cost of electricity, the cost of fuel and the uncertain global economy were all vulnerabilities to Bali’s economy that need to be considered.

Viraguna said the national political stage of 2014 and the election of Bali’s governor in 2013 will put demands on the attention of the nation, causing larger economic issues to be sidelined. Adding to the mixture, rising electrical and fuel costs and their possible impact on the growth rate of Bali’s economy cannot be ignored when assesing Bali's future prospects.

He said that Indonesia’s economy is in a state of fundamental change. The Republic is not longer an oil exporter but a net importer of the fossil fuels needed to meet rising consumer demand.

Looking further afield, Viraguna said the economic crisis in Europe is unlikely to be resolved anytime soon, resulting in stunted economic growth rates for China and India. A similar, negative lead-on effect reducing economic growth will also be felt in Indonesia as a whole and Bali in particular.

“Basically, Bali’s economy will be uncertain next year (2013),” warned Viraguna. He also urged careful monitoring of tourist arrivals. At the same time, he lamented that Bali is becoming a location for transnational crime such as narcotics and terrorism.

Bank Indonesia is predicting that the island’s economy will grow 6.6-7.1% in 2013.