The Balearic economy will suffer the worst because of the coronavirus crisis, but will have the highest growth in Spain in 2021.
Analysts are forecasting a massive drop in Gross Domestic Product, or GDP in the Balearic Islands this year because of its dependence on the International Tourism Sector.
On the positive side, the Islands could lead Spain’s economic recovery in 2021 according to the BBVA Research Regional Observatory.
The communities most dependent on Tourism and Social Activities will be the worst affected by the coronavirus crisis and their recovery will be slower.
In 2020, the fall in GDP is estimated to be around -17% in the Balearic Islands and -13% in the Canary Islands.
"Tourism and Leisure activities will be the main burden in 2020, delaying their launch beyond the high season," the report said.
As activity gradually returns to the Sectors affected by the lockdown, the recovery will extend to the Peninsular, Levante and the Island communities.
After the sharp contraction of 2020, the BBVA predicts economic growth of 9.6% in the Balearic Islands and 7.8% in the Canary Islands, but says “it will be insufficient to offset the 2020 collapse" and that GDP in both communities will be still 5% below the levels reached in 2019.
The per capita income of Balearic residents will also be affected this year and the BBVA report reveals that the most touristy communities could lose five or more points of relative GDP per capita, which would place the Islands "in the group of communities with per capita income below the Spanish average."
The Balearic Islands will also be one of the hardest punished Autonomous Communities in terms of employment because it’s heavily reliant on foreign Tourism between April and September.