Balearic businesses play down price rises

In terms of economic activity in the Islands, CAEB highlighted the fact that the growth of prices in the Balearics is more favourable than the national average.

Vicenç Tur, head of the confederation's Economic department, recognised the fact that the rises are “significant” but pointed to the fact that they still remain within “acceptable” levels and will not have a negative effect on the Balearic economy.

However, Tur did express his concern about expected rises in petrol prices in the future and the possible impact this would have on prices and the Balearic economy. Nevertheless, he did not give much importance to the upturn in the price of a barrel of crude oil registered in the last few weeks. “The really worrying situation would be if the level of increase maintained this momentum over a period of time” he suggested. “If it did so, there would inevitably be repercussions in economic structure. In the case of the Balearics, there would be knock-on effects in the cost of travel and therefore of tourism” explained Tur. He added that such an impact would promote inflation on the Islands.

He pointed out that year-on-year inflation, which stood at 2.2 percent in the Balearics in April, is within acceptable levels set by the Central European Bank (BCE). The aim of this organisation is to maintain annual rises within the confines of 2 percent. “We are enjoying a more favourable level that Spain's average” he confirmed, “but it is not as good as we would like”.

Finally, Tur expressed his hope that within the next few weeks, the Oil Exporting Countries (OPEC) would adjust their current levels of production to put an end to client concerns.

If this were to be the case, the current upward trend pointing towards economic recovery, would therefore remain unharmed.