Balearic economy performed worst in Spain last year

THE Balearic economy last year performed the worst in Spain and little improvement or growth is expected for this year either.
Coupled with the Canaries, traditionally Spain's two key tourist destinations, the Balearic economy posted the lowest level of growth last year.
In general, Spanish economic growth has slowed over the past two years, but last year's 0.24 per cent growth rate in the Balearics was well below the 2.19 per cent national average. Financial experts yesterday said that the main reason for such sharp economic decline in the Canaries and the Balearics is the two regions' dependency on tourism and, especially in the case of the Balearics, a dependency on the German market, which crashed last year and has still yet to show any significant signs of recovery. Business in the Balearics does not expect the economy to perform much better this year. Economists and the local government have said that, at best, the economy will struggle to post a growth figure greater than one per cent. The fall out from the conflict in Iraq is not only having a negative affect on tourism, the airline industry, one of the main employers in Majorca, is already considering further cost cutting exercises, on top of the measures taken in the wake of the September 11 attacks. Iberia announced only yesterday that it is scaling down flight operations this month and other airlines may well follow suit. Easter holiday and flight sales on the Spanish market are well down on last year. Further economic decline and commercial activity will also lead to further rises in unemployment; unions are already studying what action can be taken on behalf of employees against hotels which have decided to put back their opening dates because of poor bookings.