The Balearic Islands has the worst economic outlook in Spain this year. Gross Domestic Product, plummeted by 26.4 percent during lockdown, and 30.1% in June, year-on-year, according to the latest data from the Independent Authority for Fiscal Responsibility, AIReF.
It’s the worst economic collapse in history for the Balearic Islands and could cause a massive drop in household wealth.
Ministry of Economic Model & Tourism Representatives say what happens in August September and October will determine how the financial year ends.
If coronavirus data remains stable and a certain level of tourism can be maintained, it’s possible that the end result will be better than expected, but the Government claims it’s impossible to predict what will happen because uncertainty is causing continuous fluctuation.
The AIReF Report forecasts the absolute worst for the Balearic Islands in terms of quarterly variation and annual drop, putting it in the same bracket as Valencia which has a quarterly drop of 22.1% and an annual decline of 25.6%.
AIReF estimates a second quarter fall of 18%-22% year-on-year in Spain.
Tourism suffered more than any other Sector during lockdown and since the Balearic Islands is 80% dependent on Tourism, it is one of the worst affected Communities in Spain and the paralysis of tourist activity is dragging the entire global economy behind it.
The collapse of economic activity will also affect GDP and Government income next year, because tax collection will drop alongside the economy and budgets are likely to be trimmed right back to the bare bones.