Based on projections produced by the Denpasar office of Bank
Indonesia (BI), The Jakarta Post reports that Bali's economy is
expected to remain robust through 2010.
Jeffrey Karipuan, a
Bali-based economist with Bank Indonesia said: "We are optimistic
Bali's economy for 2010 will remain strong following solid performance
during 2009. Since the third quarter last year, the growth reached 4.17
percent." He cited small-medium sized enterprises (SME) as having added
that SMEs have provided positive multiplying effects on the island's
economy. Adding, "the SMEs also dominate bank loans, with 80 percent of
total loans disbursed to the sector. They have proven to be resilient
in facing crises."
Bank loans in Bali increased 20 percent over 2009, as compared to a 6% growth rate in loans nationally.
The
overall loan structure in Bali is dominated by consumption and capital
expenditure. "Most of the loans are spent for consumption and capital
expenditure. Only small parts are channeled for investment," Jeffrey
said.
The buoyancy of the SME sector was also demonstrated by
the relative absence of non-performing-loans (NPL) within that sector
of the economy. NPL's in Bali stood at 2 percent, a figure below the 3
percent rate for loans given to bigger businesses.
According to
Bank Indonesia, economic growth in Bali is fueled by hotels and
restaurants, contributing 80% of all growth on the island.
The
agricultural sector continues to lag, failing to realize its hidden
potential. 60-70% of the agricultural products consumed in Bali come
from Java, West Nusa Tenggara and overseas.
Economists are
calling on Bali's government to lend greater support to the
agricultural sector by providing incentives to farmers. Only 600,000
Balinese are estimated to still work the land in Bali with many
shifting their source of employment to the hotel and tourism sectors.