THE global financial crisis has meant that economic growth in the Balearic Islands has “stagnated” said the Balearic Business Federation (CAEB)yesterday.

The Federation reported - almost at the end of 2008 - that the Gross Balearic Product (PIB), has moved only 0.1 percent, in stark contrast to the 1.4 percent which was forecast by the Centre for Economic Research (CRE) at the beginning of November. In fact the Federation was not discounting the possibility yesterday that the year could close with a negative figure. They described the situation as being only slightly better than the poor results achieved in 2002. Federation president, Josep Oliver was speaking yesterday in Palma at a presentation of the Balearic Economic Report for 2008 which has been based on data available up until the end of November this year. He said that of all the Islands, the PIB of Majorca is the only one which currently has a positive result, 0.1 percent, which, he said, can hardly be referred to as “growth”. Minorca's PIB however, fell by 0.7 percent as did the PIB in Ibiza and Formentera, by 0.2 percent. Analysed by sector, Construction has slid this year by 3.3 percent after a positive growth of 3.6 percent over the past few years, Industry has fallen off largely as a result of poor Construction activity, whilst Service industries have rallied slightly by 0.6 percent. For the first time in ten years, however, the Islands are on a “slight declining curve,” reported the Federation.

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