Bali unlikely to reach target growth

Bali is unlikely to reach its target of 6 percent economic growth this year because of dwindling orders for non-oil products from countries hit by the global financial crisis, the Bali Central Statistics Agency (BPS) says.

"We forecast growth at 5.9 percent because exports are slow and the number of tourists at the end of the year may not be high enough to boost the growth," Bali BPS head Ida Komang Wisnu told The Jakarta Post after a media briefing Tuesday.

With the economy growing by 4.55 percent from January to September this year, the island still needs growth of 1.47 percent during the last three months of the year.

Exports in the third quarter were 7.48 percent lower than in the second quarter, although they were 11.68 percent higher than in the same period last year, according to the BPS.

The main contributors of growth in the third quarter were trade, hospitality and agriculture, head of the BPS statistical analysis division Yudhadi said.

But consumer spending remains the island's economic engine, contributing 57.47 percent of growth, 10 percent of which came from the administration.

"Well, this is not a very good sign of growth. It would be much better if investment played the major role," he said.

Wisnu said inflation at the end of the year would be far from the projection of 6 percent, as inflation from January to October reached 8.83 percent in Denpasar.

He said the inflation figure would not fall, but the government's plan to decrease the price of subsidized fuel could offset it.

"Inflation is easily affected by the public perception. The plan to decrease the fuel price is a chance to control it," he said.

Although many parts of Indonesia, especially Java, see a rise in inflation at the end of each year because of Christmas and New Year celebrations, Wisnu said inflation in Bali usually remained stable during that period.

"Historically, Bali never sees soaring inflation in November and December. October alone saw only 0.32 percent inflation. I think we may not reach two digits for inflation at the end of the year, or we may just reach it," he said.

The Bali branch of the Bank Indonesia earlier made the same forecast for economic growth, putting it at 5.9 percent at the end of this year, with inflation at 9.28 percent as of September, below the national average of 12.4 percent.