The Jakarta Post, Sun, 10/26/2008 12:00 PM | Bali
DENPASAR: The property sector in Bali is feared to go bankrupt due to the impact of the U.S.-led global financial crisis, Bali Chamber of Trade and Industry (Kadin) head I Gde Wiratha said Friday.
Speaking after a meeting with Bali Governor Made Mangku Pastika,Wiratha said the property sector was the sector most at danger from the crisis.
“This sector will be the most vulnerable because it is financed mostly by foreign funds.”
Wiratha said most property businesses in Bali, especially villas and hotel development businesses, were owned by foreign investors and financed by U.S. and European banks.
He said the impact of the crisis was already being felt at the moment.
“They are in a wait-and-see mode,”he said.
The peak of the crisis in the property sector is likely to take place by the end of this year and early next year, Wiratha said.
“After that there will be many projects which are feared to be abandoned in Bali,”said Wiratha, who is also the former chairman of the Bali chapter of the Indonesian Hotels and Restaurants Association (PHRI).
Sector financed by local investors will be able to survive because liquidity in the local banking industry remains strong, he said. — JP