Related news: Mallorca facing a long hard winter, fears of a recession

The President of the Balearic Government, Francina Armengol, warned that the Balearics will suffer “a more complicated winter” due to the “seasonality” of the islands, although she predicted “a good outlook” for spring during the business breakfast organised by the Impulsa Baleares Foundation today at CaixaForum.

“We are very aware that we are an economy closely linked to the service sector and that is why we will have a winter that may be more complicated,” but she stressed the government has the financial shields in place to help the most vulnerable.

“We are able to do this thanks to the largest budget in the history of the Balearics; we are an autonomous region with a solid government that can present these public accounts to deal with an absolutely necessary social shield”, added Armengol, who stressed that “economic stability” is one of the key factors of the Balearics.

She also highlighted the value of the Strategic Investment Plan for 2030, which involves “knowing where to invest for a better future for everyone”, and she stressed the importance of investing in energy transition, economic diversification, modernisation and digitisation of companies, and environmental sustainability.

For his part, the technical director of the Foundation, Antoni Riera, predicted a “complex and clearly recessionary” economic scenario , although he believes that “the starting point is not all bad” and highlighted several “strengths”.

He highlighted wage moderation, its capacity to attract international tourist flows or the solvency of Balearic companies, “generalised to all productive sectors”.

He also denied the existence of “tensions” in the labour market and stated that, “in the coming months, there will be no job losses”. Thus, “the unemployment rate should not show major fluctuations”, concluded Riera.

The chief economist of CaixaBank , Enric Fernández, explained during the meeting that the euro zone, already in the third quarter of the year, has registered negative growth, while Spain’s growth is “close to zero or even positive”.

“The current macroeconomic context is clearly dominated by high, persistent and global inflationary pressures that erode the real income of families and put pressure on companies’ costs”, said Fernández. Therefore, “the relevant question is when inflation will return to normal levels and to what extent central banks will have to raise interest rates to achieve this”, he said.

However, according to the latest reports from CaixaBank Research, Fernández expects inflation to stand at 4.5 percent and Spanish economic growth to slow down to one percent, “without necessarily falling into recession”.

With regard to the energy crisis , he highlighted Spain’s situation, which has “very important advantages compared to other countries” due to its lower dependence on imports of Russian gas.

He also referred to the current situation in the United Kingdom , which has been “a warning” to “at times like the present”, to know that it is “very serious to make a mistake in policy and communication”, and he described the current government in Italy as “a source of risk”, “with a very uncertain programme”.

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“Complicated winter” for the Balearics

Full economic recovery expected for the Balearics in 2022

Balearics forecast to have second highest regional growth in 2022