THE BALEARICS HAS OFFICIALLY ENTERED INTO RECESSION

PALMA
THE Balearics has officially entered into recession according to the regional Minister for Finance, Economy and Tax Carles Manera yesterday.
To mark the end of the second quarter of this year, the Minister yesterday gave a mid-year review of the Balearic economy and was forced to admit that, after growth of 0.2 percent during the final quarter of last year, that figure fell into the red during the first quarter of 2009 with the economy shrinking by 1.5 percent and, although figures are not yet available for the second quarter, Manera said that the Balearics is now technically in recession.

Manera said that the Balearics' Gross National Product, its total economic activity, is now forecast to have shrunk by 2.7 percent come the end of this year.

The Minister explained that the main factors which have dragged the region into recession are the fall in prices, the decline in the number of holiday makers, the reduction in the number of nights tourists are spending in the region, the fall in hotel accommodation and the 14 percent drop in commercial activity because of the knock consumer confidence has taken from the credit crunch.

The Minister added that economic downturns in Germany, Britain and on mainland Spain have also had a negative affect on the Balearics.
The only positive factors are that tourism spending has in fact risen by 2.7 percent this year and a slight upturn in the construction industry, but the overall downturn is expected to continue.