Bar terrace in Palma, Mallorca

Only a few weeks of the tourism season left. | Jaume Morey

Andrew EdePalma07/09/2022 19:30
TW
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The latest report from the Mallorca Economy Circle think tank points to a slowing-down of the Balearic economy in July. This followed more than a year of intense recovery and growth after the collapse caused by the pandemic.

The report bases its conclusion on the fact that only 48% of indicators showed an acceleration. July was the first month since the spring of 2021 when these indicators were not over 50%, suggesting the start of a slowdown phase.

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Celestí Alomar, the Balearic tourism minister responsible for the 2002 ecotax.

"It is essential that the GDP weight of tourism decreases"

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The Circle's forecast is for economic growth to lose intensity over the coming months. The slowdown trend is expected to become truly evident from October and will last for most of 2023. Inflation is inevitably going to play a decisive role over the coming months, says the report, resulting in loss of consumer purchasing power and a further increase in costs for businesses.

It is noted that an end to the expansionary phase has been predicted for some time, the question now being whether a combination of the end of the tourism season and persistent inflation will have a greater negative impact than has been expected.

It is believed that the Balearics will be harder hit than other Spanish regions because of the economic situations in other European countries, Germany and the UK in particular.