Tourists Arriving in Palma.

Tourists Arriving in Palma. archive photo.

16-11-2020Ultima Hora

The Balearic economy will sink by 28.8% in 2020, the largest decline in the country, but will recover just over a third of the fall in Gross Domestic Product in 2021, according to Government forecasts.

The Islands will lead the recovery in Spain and Europe next year and Francina Armengol's Government estimates growth of 11.1% in 2021, which is in line with other forecasts, such as BBVA.

Even if that forecast materialises the Balearic economy won’t be at pre-coronavirus crisis levels and although some of 2020’s losses would be recovered, the economy will continue to suffer until the Tourism Sector is 100% reactivated.

Tourism & Work Minister, Iago Negueruela, referred to these forecasts in Parliament last week to account for his department's budgets for next year.

"With the information available today we predict that 2021 will be a year of transition, where only part of the level of GDP will be recovered," said Minister Negueruela, who stressed that the Balearic economy has plummeted by more than 28% in 2020 compared to 1.8% growth in 2019.

He also pointed out that the current crisis is very different from previous ones.

"Most of the fall in income is not due to the disappearance of the productive fabric, it’s because of the temporary closure of activity,” said Minister Negueruela, who insisted that tourism demand "exists and is latent" and that he hopes “activity will be reactivated as soon as the risk of infection disappears.”

These forecasts preceded Pfizer's Covid-19 vaccine announcement and the Government's decision to demand negative PCR test results from foreign travellers.

It’s still too early to measure the impact that will have, but the Government is already working with Balearic tourism companies and the main emitting markets with a view to kickstarting the tourist season in April 2021.

Right now there are more questions than answers and the only thing that is certain is that nothing will be the same as it was before the coronavirus crisis.

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