Economic growth still struggling

Balearic economic growth forecasts for this year have been readjusted to around one per cent, half the government forecasts at the start of the year. The slow down appears to have been sharper than expected with the Balearic Treasurer, Joan Mesquida, saying yesterday that 2002 Gross National Output for the Balearics will see growth of between 0.8 and 1.2 per cent. Joan Mesquida explained that continued exterior influences have held economic growth back. The pending US attack on Iraq, the high rate of inflation in the Balearics and the general down turn in global economies are all taking their toll on the local economy. Just a few days ago, the Balearic posted GNP growth at 1.4 per cent for this year, but yesterday Mesquida thought it wise to err on the side of caution and settle for one per cent. Mesquida however was quick to deny claims that the Balearic economy is heading into crisis - he said that the third quarter of the year has been positive with GNP growth of 0.8 per cent for July, August and September, on par with the United Kingdom and Germany. Mesquida said that October was productive, the service sector posted a 1.3% increase in activity, the construction industry reported a 3% increase, despite the building freeze which is supposed to have been enforced. However, the core of the Balearic economy, tourism, has taken a knock this year, but Mesquida said that while air passengers figures have fallen by 6.9%, ferry passengers figures have risen by 9.2%. Nevertheless, the Minister said that the 3.9% rate of inflation has to be reduced because it is making tourism expensive in the Balearics.