Business News

CCTV Script 06/08/18

— This is the script of CNBC's news report for China's CCTV on August 6, 2018, Monday.

We are still waiting for further data about the specific property loss and economic impact report regarding the earthquake that occurred on the evening of the 5th in Lombok, Indonesia. However, according to the current casualties, this accident will first have a certain impact on the local tourism industry in the near future. We know that tourism is one of the five pillar industries of the Indonesian government's priority and an important source of income for Indonesia. This year, the number of international tourists visiting Indonesia is about 1.25 million per month, and the Indonesian Ministry of Tourism hopes to attract 17 million and 20 million international visitors this year and 2019.

Lombok is considered one of the most popular islands for tourists. Among them, just a few nautical miles away from the northwest coast of Lombok is the world-famous Gili Trawangan, the number of tourists it attracted just follows Bali's.

As you can see, Lombok is also very geographically close to Bali, and visitors from Bali also reported that the earthquake was very strong yesterday.

Therefore, it is possible that in the near future, some local or international tourists who plan to travel to this area will postpone or cancel their trip. We know that Indonesia is an archipelago including thousands of islands, located on the so-called fire ring around the Pacific Ocean, an area where has ​​frequent earthquakes and volcanic activity.

The World Bank estimates that the average annual economic loss caused by natural disasters in Indonesia may be equivalent to 0.3% of GDP growth. Among them, the blow to the tourism industry bears the brunt. For example, at the end of last year, due to the volcanic eruption on Bali, the Bali International Airport and Lombok Airport were closed. In the following 12 months, international tourists dropped sharply, especially that from China. According to the Indonesian Association of Travel Agents, the average consumption of Chinese tourists in Bali is between 5,000 and 10,000 yuan. Based on the loss of 100,000 Chinese tourists per month, the direct loss to Bali is 500 million to 1 billion yuan, while the indirect losses were even more.

Therefore, the emotional impact of the tourists brought by this earthquake will be the emphasis to the tourism industry. On the other hand, from the perspective of the overall economy, the earthquake and tsunami did not have much impact on the overall economy of Indonesia, and trade was basically not affected. However, funding is needed for the rehabilitation and reconstruction in the affected areas, and this may put some pressure on the national budget. We will keep an eye on this issue.