Balearic economy slowing down, but no recession

The global economic down turn is going to slow Balearic economic growth next year. Under the pre-September 11 economic climate, initial forecasts for 2002 indicate the Balearic economy growing by 3.5 per cent, but now, gross national output in the Balearics will have to settle with 2.8 per cent growth. But, the region is still performing better than the rest of Spain, where total economic growth has been 2.8 per cent for this year, well above the European Union national average of 1.5 per cent. Balearic Finance Minister, Joan Mesquida, said yesterday that at the close of the year, gross national output in the Balearics will have grown by 3.6 per cent. Despite the slight down turn in the local economy next year, Mesquida is convinced that the Balearics is “well prepared to deal with the slow down and is in a far better condition that any other of Spain's autonomous regions to absorb the impact of the global recession.” “We're not in recession,” Mesquida said “merely in a period of gentle economic deceleration which could have a positive effect by making people more aware about the true value of money.” While the US economy is a long way from the Balearics, the islands' financial fortunes are highly dependent on the performance of the UK and German economies. Joan Mesquida said that projected growth for the British economy is 1.9 per cent while the German outlook is a slow and poor 0-7 per cent. The Minister said that this year's sharp rise in the number of British tourists has been fuelled by the UK's healthy economy, low inflation and record unemployment figures of just 3.1 per cent. But while British consumers are buoyant, the Germans have lost their confidence.