Balearic government says that if it were not for public investment, unemployment rates would be much higher

PALMA
BALEARIC Economy Minister, Carles Manera, said yesterday that the regional unemployment rate would be 4 or 5 percent higher if it were not for government backing and so in his view, public spending to maintain job levels needs to remain the same.

Manera was giving a summary of a report based on figures which were received last week after a Balearic Economy steering committee meeting.
According to the Minister, public investment had been doing “all the donkey's work” for the economy of the islands over the last three years, although he has already given notice that cuts will have to be made in 2011 and it is at that point that the private sector will need to react.

Manera claimed that according to information covering the first quarter of the year relating to construction, tax collection and commerce, there are signs of an economic upturn, but it was still impossible to talk in terms of overcoming from the crisis, or even that there are “green shoots” emerging in the Balearic economy.

Manera said that this upturn in what he described as “soundly based economy” would have been “even greater” if the government had not had to use public funds to take emergency measures over bringing down the public deficit. He said that the situation had become a “paradox” which he believed was only slowing down any economc recovery. “There are no green shoots, there is nothing I can really talk about as being a positive element in the Balearic economy in terms of its commercial and industrial sectors, but what can indeed be said is that the downward spiral of decline that we have witnessed over the past few months has now come to a stop,” confirmed the Minister. He said that the worsening situation in all sectors of the regional economy was grinding to a halt.

Manera, however, gave a reminder that the Balearic government is maintaining that there will be a downturn in the Gross Balearic Product of 0.9 percent this year, a greater decline than the 0.3 percent which has been forecast for the country as a whole.

Speaking about predictions for the tourist season, Manera said that the data is “highly contradictory” because whilst the average tourist spend has declined, there are more take-off and landing slots booked at the airports in the Balearic Islands which means higher hotel occupancy rates.