Tourism is naturally a key element of Balearic economic forecasting. | Jaume Morey


When it comes to forecasts for economic growth, there is always a choice. The three most prominent ones for the Balearics in 2023 are currently those of the Balearic government's directorate for the economic model, the AIReF Independent Authority for Fiscal Responsibility, and BBVA Research. AIReF's is the highest - 4.7%; BBVA's is the lowest - 3.1%. The Balearic government's is bang in the middle - 3.9%.

Whichever of these three is chosen, they all have one thing in common. Economic growth in the Balearics this year will outstrip that of any other Spanish region and it will be around twice as high as the national figure.

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In 2022, according to the government, there was growth of 14.2%. This was obviously a figure influenced by the continuing and negative impact of the pandemic in 2021. The Balearic economy suffered more than that of other regions because of the collapse of tourism, but the dependence on tourism that had led to significant negative growth was also a key reason behind 2022's recovery. The government points out that 2022 would have been more positive had it not been for a first quarter that was influenced by Omicron and some restrictions.

The forecasts for 2023 therefore reflect an improved first quarter, while the minister for the economic model (and tourism and employment), Iago Negueruela, is drawing attention to anticipated good performance by the main economic sectors, assisted by European funds and the REB special economic regime for the Balearics. Businesses, he says, will be able to invest more, which will have a multiplier effect, while the increased funding will also allow major government investment.

Negueruela adds that BBVA have told the government that their growth forecast is partly based on developments regarding salaries. Pointing to the new collective bargaining agreement for the hospitality sector as an example, the minister says that the "effectiveness" of negotiations in the Balearics to raise salaries means that "we will have stronger economic numbers based on pay and not on tips".