Easing of restrictions has had a small economic benefit.

Easing of restrictions has had a small economic benefit. | Jaume Morey

Majorca Daily Bulletin reporterPalma25/05/2020 13:18
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Since the start of the pandemic, the Balearic Islands' cumulative economic loss is put at 1,998 million euros, equivalent to 6.1% of annual GDP by the Fundació Impulsa for Balearic competitiveness. Its latest report indicates that the gradual lifting of state of alarm restrictions in Phases 0 and 1 has had a positive impact in that over the first three weeks of May the loss slowed by 150 million euros compared with what it was at the end of April. The weekly generation of economic value in May stands at 36% of what it would normally be. In April, this was 38%.

The technical director of Fundació Impulsa, Antoni Riera, stresses that supply and demand response to the easing of restrictions remains very uncertain. Companies' investment capacity and households' consumption capacity have both been greatly affected.

He believes that it is necessary to place business viability at the fore in a comprehensive response to the crisis. Resources have been made available to companies, but there needs to be a second round which provides a proactive response rather than just one of economic contingency measures. New action is being worked on, Riera adds, to address the financial risk companies face in obtaining further debt and making investment decisions which are not just necessary for survival but also in order for the reorientation of business.