Balearic economy will fare worst in Spain this year

By Lois Jones
THIS year, the Balearics is currently trailing in figures for economic growth, according to the economic watchdog Hispalink.
Growth rate for the Islands is registered at 0.8 per cent against a national average of 2.3 per cent. These statistics reflect a “very delicate situation” in economic terms. The study, produced by a team of economists from 18 Spanish universities and sponsored by the Chamber of Commerce, cites 2004 as the year of “consolidation” when the rate will pick up at about 2.8 per cent. The report points to Madrid, with a present growth rate of 2.7 per cent, and Castilla-León and Murcia both with 2.6 per cent, as the Spanish communities experiencing the fastest economic development in 2003. Following these leaders, Extremadura registers at 2.5 per cent, while the Gross Product of La Rioja, Navarra and Valencia shows growth of 2.4 per cent. For Hispalink, “the other side of the coin” is made up of the Balearics and the Canary Islands with growth rates of 0.8 and 1.9 per cent, respectively. “The two archipelagos remain at the back of the queue awaiting an up-turn in tourist markets” states the watchdog, and adds that the “situation in the Balearics is particularly delicate”. The economies of Catalonia, Andalucia, Aragon and Cantabria maintain growth rates on par with national average showing 2.3 per cent in the four regions. Apart from the Balearics and the Canary Islands having growth rates below the national average, Asturias and Castilla-La Mancha both register 2.2 per cent, Galicia 2.1 per cent and the Basque Country, 2 per cent. The study suggested that regional growth perspectives will improve even more in 2004 and predicts “a general increase in regional economic initiatives.” This will be particularly in Andalucia, Castilla-La Mancha, Valencia, Murcia and Madrid which will all witness growth rates of more than 3 per cent. With regard to analysis of growth rate by sector, the report indicates that it is in industry where the effects of combined economic recovery will be most strongly noticed. The watchdog confirmed that by the close of this year, construction will witness deceleration in the sector which began in 2002 although it will maintain a positive overall stance in relation to other economic sectors. Predictions for this year and 2004 in the energy sector show stable growth, not so accelerated as in 2002.
The report suggests that in the next few years, energy will develop “very positively in comparison with other sectors”.
Service industries, points out Hispalink, “the predominant sector of Spanish economy” will develop this year at a rate of 2.5 per cent.
Transport and communications, classed as subsectors, will do the same at a rate of 2.7 per cent while other services will experience growth of 2.2 per cent.