In a recent report published by BI, Bali's economic growth is expected to increase in the range of 6.0% to 6.4% Year on Year (YoY) largely due to an improved performance of household consumption, government consumption, investment and foreign exports.

At a glance

• BI predicts that Bali's economy for 2018 will accelerate in a range of 5.9% to 6.3% YoY.
• Acceleration driven by demand - household and government consumption, investment. 
• Inflation between Q3 and Q2 is expected between 3.76% and 4.16%, higher than the 2017 realisation of 3.32% YoY. 

From the business side, the economic acceleration in Q3/2018 is being driven by an improvement in certain key areas such as Food & Beverage Accommodation, wholesale and retail trade, transportation and warehousing, construction and processing industries. 

BI predicts that by observing economic developments, prompt indicators and results of the latest surveys, Bali's economy for all of 2018 will accelerate and grow in the range of 5.9% to 6.3% (YoY).

This acceleration is being driven by an increase in all major factors concerning demand, including household consumption, government consumption and investment.

In terms of business, there are four main sectors underpinning Bali's economy; agricultural, the processing industry, construction and transportation, and warehousing.

Inflation however, in Q3/2018, is also predicted to increase compared to Q2/2018. This increase is expected to be somewhere between 3.76% and 4.16%, higher than the 2017 inflation realization of 3.32% (YoY) but still within the national inflation target range of 3.5% +/- 1%.

BI believes this increase is being caused by the tourism industry's High Season, school holidays and the new school year. These have the potential to encourage an increase in demand, which then has an impact on the increase in strategic commodity prices, otherwise called inflation. In addition, there is also an increased risk of inflationary pressure due to the forthcoming IMF-World Bank Annual Meeting scheduled to be held in Nusa Dua in October.

Source: Bank Indonesia

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