FOREIGN investment in the Balearics last year produced a major u-turn to show significant growth after an alarming decline in 2004.
Just 12 months after overseas investment in the region crashed by 91 percent, the Ministry for Industry, Commerce and Tourism has reported that foreign investment recovered by 63.3 percent last year to reach a total of 186 million euros. The biggest investment block is the former 15-member state European Union with an apparent real estate sector boom fuelling last year's welcome recovery. South America and the United States were also key investors accounting for 2.9 and 1.7 percent respectively.
The property market and its related businesses attracted over 124 million euros of foreign investment, up 35 percent of 2004, last year, nearly two thirds of the total investment figure. Property sector aside, the main foreign investment market was the hostelry sector which attracted nearly 50 million euros of overseas finance with the construction industry coming a rather poor second. The Balearic government's director general for finance, Maria Marques, says that the reason the region's sector largest foreign investment sector is hostelry indicates that the tourist industry maintains a very positive international image which has attracted some of the world's leading hotel chains to move into the Balearic market and is being sold and marketed effectively at a global level. However, the Balearic foreign investment market, guided by global factors such as the price of oil, has suffered a roller-coaster five years of highs and lows and still lacks sustainability but, at present, the forecast for this year indicates that last year's figures should be repeated.
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