Palma.—The Balearic economy is now entering a phase of growth, Economic Research Centre (CRE) Director Antoni Riera claimed yesterday.
Speaking at the CRE's presentation of this year's second quarter report, Riera said that despite the 0.3 percent growth registered, the regional government needs to overhaul its budget policy and instigate a medium-term structural reform of the Administration.

Riera explained that a part of the budget deficit is linked to economic cycles and no specific controls can be imposed on it, but another part is indeed determined by the government. Riera said that those in power need to look at the amounts of income and spending which are discretional and to adopt a highly disciplined approach to the budget.

According to the Centre for Economic Research run by the Sa Nostra banking group and the Balearic University, “it's not sufficient just to make cuts at random. “It's really necessary to be very careful about what funds are being trimmed because if cuts are made in the wrong place, such action could have a negative effect on the economy,” said Riera.

He added that in his opinion, the part of the deficit which was most suited for cuts was thatwhich related to public companies. “There's a great deal of ground to be covered here,” Riera insisted.

Riera said that the Balearic economy had done well to grow by 0.3 percent in the second quarter, considering that it had in fact shrunk in the first by 0.1 percent, but he pointed out that this “recovery” had happened a year later than in the rest of Spain. But he said that it was important to realise that growth was minimal and what positive figures there are have been triggered by the onset of the tourist season which started in April this year due to a late Easter.

Riera warned that only 22 percent of economic data for the Balearics was positive “which means that only around a quarter of the economy is showing signs of growth,” he said.


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