The Balearic economic boom is finally over

The Balearic economy which was expanding at a rate well above the European average at the end of the 90*s is settling down to a more manageable pace, but if production in the construction industry starts to ease off, much of the manual labour which the Balearics has imported over the past few years will have to return home either on the mainland or overseas, the Balearic Minister for Finance, Joan Mesquida, said yesterday. At the end of the third financial period of the year, Mesquida said yesterday that the Balearic PIB, Gross Interior Product this year is growing by 4.3 percent and is forecast to settle down to a more realistic “solid and stable” 3.5 percent in 2001. Last year the Balearic PIB posted a growth rate of 6.3 percent, much higher that the European Union average of 3.5 percent and the national PIB of four percent. At the end of 1999, Mesquida said that the brake had to be put on the economy, with the ideal growth rate being around the 3.6 percent mark, which Mesquida looks set to meet. Economic forecasts for 2001 indicate that the Spanish economy will grow at a rate of 3.6 percent, the European Union by 3.5 percent and the Balearics 3.5 percent. Mesquida said that a more stable economy will help taxes develop a more “solid and manageable line of growth” with increase of between three and 3.5 percent, similar to other European Union countries which in turn, say the experts, will help steady the rate of inflation. This year productivity in the construction industry, which has shown an increase of 9.3 percent has already slowed slightly in comparison to last year's 11 percent. The service sector has enjoyed a 4.1 percent growth, industry 3.8 percent and while the agriculture and primary service sectors have suffered a decline of four percent, that figure is expected to be halved in 2001. The fastest growing economy in the Balearics this year has been Ibiza, where the PIB has expanded by 5.5 percent in contrast to 4.2 percent in Majorca.