Fears of a recession gripping the Balearics are greater than ever and yesterday the President of the Confederation of Balearic Business Associations (CAEB) warned that economic growth next year could be negative, the first time in a decade. Josep Oliver announced yesterday that gross national output in the Balearics rose by just 2.3 per cent during the first six months of this year and that the Balearic government is partly responsible for the unstable economic situation in the region. Oliver believes that the local government, whose tourism policies were heavily criticised last week by the hotel sector and blamed for damaging the tourist industry, has made a series of mistakes. These include such policies as the tourist tax, the construction freezes and the negative comments which have been made about mass tourism in the Balearics, which Oliver said have forced British and German tourists to look elsewhere. In 1999, the Balearic economy grew by 7.1 per cent, last year the rate of growth settled at 3.4 per cent, dropping further to 2.3 per cent this year and Oliver does not envisage the rate rising over the next five months. The CAEB's latest set of figures show that revenue from tourism has fallen by 2.5 per cent this year, once the inflation rate of 4.5 per cent has been accounted for. The fact that the Balearics as a destination has lost its dominance in six key markets paints a gloomy picture for the future. “Losing our market position is very dangerous. It's very easy to lose your market standing, but extremely difficult to win it back,” Oliver warned.

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