The regional government estimated that the PIB increased by 0.7 percent in 2003, while the Sa Nostra Research Centre and a Balearic business federation believe that the Islands' economy grew by 1% and 0.3%, respectively. With regard to growth in 2004, the government predicts a 1.6 percent growth and the business federation, one of 1.5 percent.
According to the organisation's head, Miquel Lladó, the assessment of low economic growth in 2003 is due to a 0.7 percent fall in income from the tourist sector; this industry alone represents 58 percent of the Balearic gross product.
The construction industry went into crisis during 2003, confirmed the Chamber, reducing its activity by 0.3 percent in contrast to the 4.2 percent rise that it experienced in 2002. The scenario had largely been due to the freeze ordered on building activity by the previous Socialist government. The order was lifted this month by the present Council of Majorca which came into power in May this year. The Islands' industrial sector registered a notable downturn in activity in 2003, with only 0.2 percent growth. This figure veers sharply away from the 1.9 percent increase the division had achieved in 2002. The Chamber of Commerce justified its pessimistic predictions by pointing to the strength of the euro which augurs badly for tourist spending in the Balearics, particularly those visitors from the United Kingdom who won't be able to purchase as many euros with the Pound Sterling. Terrorist threats, they said, could also affect air travel.