INFLATION STARTS TO SLOW IN THE BALEARICS

INFLATION in the Balearics is starting to slow down, although it is still riding at 3.2 per cent on the year.
Last month however, price increases in the Balearics were some of the lowest in Spain at just 0.7 per cent.
Leading economists said yesterday that one of the reasons is the continual rise in strength of the euro which is leading to a reduction in fuel prices and interest rates. The strong euro also means this a good time to go to the United States, visitors from euro zone countries will find the US some 40 per cent cheaper than last year and the United Kingdom will also appear less expensive. The reverse will be the case for visitors to the Balearics, for example, from the UK and tourism experts are worried that if the euro continues to gain ground against both the dollar and the pound, non-euro zone countries may start proving more attractive. But while the Balearic consumer price index is starting to steady, tourism prices last month rose more than any other Spanish destination.
The National Statistics Institute yesterday reported that over the past 12 months, service sector prices have risen by 5.5 per cent in the Balearics and by two per cent last month. In general, hotel and accommodation rates have risen by 6.2 per cent over the past 12 months while bar, restaurant and cafe prices have increased by 4.3 per cent. Add to those price rises, increase in the value of the euro, just six months ago the euro was valued at 65 pence, today it is 72 pence, and visitors, especially from non-Euro zone countries such as the United Kingdom, are going to find the Balearics much more expensive than last year, as some euro countries, such as Germany found last year, when the single currency made prices much more transparent to consumers.