Palma.—Aguilo was quick to quash fears that the region, along with the rest of Spain, will slip back into recession next year following comments made by the country's new Minister for the Economy, Luis de Guindos, on Monday.

Guindos dampened already gloomy expectations for the economy as the new conservative government got to work on its programme of tough spending cuts. “This quarter the Spanish economy will surely see a downturn and we will return to negative growth,” he told a news conference. “Make no mistake, the next two months are not going to be easy, neither from a growth nor a jobs point of view,” he said.
The fourth-quarter outlook “is logically going to determine the (economic) profile we will enter in the coming year, which is going to be a relatively slowed-down profile.” Media quoted him later telling reporters that gross domestic product would contract by 0.2 to 0.3 percent in the current quarter. Spain's official growth figure for the third quarter was zero and De Guindos' words were interpreted as a sign that Spain will tip back into recession in the coming months.

But, here in Palma, there appears to be more optimism than in Madrid.
Aguilo said that the region's economy is “very solid” and attributed that to the fact that the Balearics is one of Spain and Europe's most popular holiday destinations and always has the tourist industry propping up the local economy. “We have one of the best GDP components in Spain, tourism, but that does not mean we have to adjust our economic policy,” he said. “The Balearics is not going to enter into recession. Growth may be very slow during the first months of the year because the tourist industry is rather quiet. The winters are tough, we know that and we intend to address this,” he added. “We are going to enter into a period of moderate growth, at the moment the forecast is of around 1.1 percent, and we have no intention of adjusting the Balearic budget for 2012 in response to what has been said in Madrid. “We need to stick to the road map we have drawn up and first and foremost, balance the public debt, but that will not drag us back into recession,” he said.