Balearic economy contracted 4.5% in the first quarter

Tourism is the main driver of the Balearic economy. | Enrique Calvo

Majorca Daily Bulletin reporterPalma18/06/2020 08:33

The CAEB Confederation of Balearic Business Associations has published an "economic evolution" report, which indicates that gross added value contracted by 4.5% in the first quarter. Describing this fall as "unprecedented", a contrast is made with the final quarter of 2019, when it was +1.5%. The uncertainty prior to the state of alarm and the subsequent restrictions on mobility were the contributory factors.

The 4.5% decline was exactly matched by the services sector, which had stood at +1.4% in the October-December quarter last year. Tourist arrivals were down 33.6% and overnight stays by 39.4%.

The industrial production index for March was at its lowest level ever and ended the quarter with a 10.5% decrease. In construction there was a quarterly fall of 5.8%, the final quarter of 2019 figure having been +3.5%.

The CAEB president, Carmen Planas, said on Wednesday that the data point to a "recession scenario", with greater decreases to be anticipated for the second quarter. As the Balearics face a tourism season that is "full of uncertainties", she called for an "exercise in integral governance" of the Balearics as a tourist destination in order to mitigate the negative impact of the crisis.

She added that as long as there is no vaccine, "we are at risk, and so ERTE must remain a necessary tool to prevent companies suffocating and to protect employment".