CRISIS IN LIBYA

JUST when you thought that the recession was coming to an end and up pops the crisis in Libya which is threatening to send oil prices through the roof and it could derail the economic recovery across the globe.

The Balearics has been rather upbeat over recent weeks over an increase in holiday bookings thanks to the crisis in the Middle East. But now there is danger that higher oil prices will hit the airline industry and lead to more expensive fares. Higher air fares, higher holiday prices.

Already the new airline which has come into being following the merger of Iberia and British Airways is forecasting that the crisis in Libya will hit air fares. You also get the impression that at the moment most of the world´s financial markets are on hold as they await the fallout of the crisis in Libya. I was talking to one financial expert yesterday who said that until the crisis in Libya ends no-one can make any sort of forecast on the economic recovery. The Spanish government, which is fearful of high inflation, announced a whole series of measures yesterday aimed to reducing fuel consumption. I sincerely believe that the Balearics is on the road to recovery but there are many dangers which the local authorities need to take into account such as the crisis in Libya.