Balearic Islands

The heavy dependence on tourism sectors has led to the archipelago being harder hit by the economic consequences of the restrictions on mobility and activity, so it was the region that suffered the largest drop in GDP in 2020, 23% compared with a 10.8% contraction of Spanish GDP as a whole. 

Content available in
November 8th, 2021
Illes Balears
1,211,000
inhabitants (2019)
€28,213
GDP per capita (2019)
2.7%
of Spanish GDP (2019)
11.9%
GDP growth forecast (2021)
Regional economic structure and position
  • With 1.2 million inhabitants, the Balearic Islands has the 12th largest population in Spain, with 2.5% of the country’s total population.
  • With a GDP of 33.800 billion euros, it occupies 11th place among the Autonomous Communities, contributing 2.7% of Spanish GDP.
  • The total GDP per capita stands at 28,213 euros, the 6th highest and slightly below the Spanish average.
  • In terms of production specialisation, it is notable for the relative importance of trade, transportation, hotels and restaurants and leisure (40.9% of the region’s GDP vs. the 28.3% accounted for by the sector in the Spanish economy as a whole) and real estate. However, it is the Autonomous Community where the industrial sector carries the least weight.
  • Although the contribution of exports of goods to Balearic GDP (4.5%) is the smallest of all regions, in keeping with the lesser weight carried by its manufacturing sectors, this Autonomous Community is notable for the importance of its exports of tourist services. Thus, in 2019, before the pandemic, foreign tourists spent a total of 14.843 billion euros in the Balearic Islands, 16% of their total spending throughout Spain.
  • The main exporting sectors are: chemical products (37.7% of the total), transport equipment (21.2%), energy products mostly supplied for aircraft and ships –, footwear (4.6%) and food (3.5%).

Table of structural indicators

 

   

1989

1999

2009

 

2019

GDP per capita

Euros

 

9,096

18,200

24,561

 

28,213

100 = Spain

 

122.4

124.5

106.5

 

106.8

Population

Thousands of inhabitants

 

705

817

1,084

 

1,211

Average annual growth over the decade (%)

 

0.9

1.5

2.9

 

1.1

% of total in Spain

 

1.8

2.0

2.3

 

2.6

% of population > 65 years old

 

4.5

4.3

4.0

 

4.6

Exports of goods as a proportion of GDP

%

 

...

5.6

4.5

 

5.5

 

 
Macroeconomic situation

The heavy dependence on tourism sectors has led to the archipelago being harder hit by the economic consequences of the restrictions on mobility and activity, so it was the region that suffered the largest drop in GDP in 2020, 23% compared with a 10.8% contraction of Spanish GDP as a whole.

For 2021, our forecasts suggest that the economy will partially recover, with a GDP flash estimate of 11.9%, which would put it 13.6% below pre-COVID levels. Specifically, we expect an upturn in economic activity in the second half of the year, thanks to the recovery in domestic tourism and the arrival of tourists from the EU, boosted by the Digital Green Certificate, which will facilitate the mobility of the vaccinated population in Europe.

GDP

Last actualization: 08 November 2021 - 09:05

The Balearic Islands recorded a sharp fall in registered workersaffiliated to the Social Security in 2020, –9.3% vs. the Spanish average of –2.1%, despite widespread use of the furlough scheme. Since April, employment has gradually improved, although in August it was still 6.2% below its level in August 2019. The number of furloughed workers has fallen to 17,810, 3.9% of workers affiliated to the Social Security. The unemployment rate, which has typically been among the lowest, rose to 15.2% in Q2 2021 (15.3% on average in Spain), from the 12.1% recorded
in Q2 2019.

Tourism accounts for around 35% of GDP in the Balearic Islands. Its heavy dependence on international tourism, which generated 93% of tourist spending on the islands in 2019, has led to a very steep decline in tourist activity in 2020. Thus, overnight stays by domestic and foreign tourists fell by 89% in this region (compared with 69% in Spain as a whole) and it was only visited by 1.7 million international tourists (12 million fewer than in 2019). The situation has been improving slightly in 2021 and, in July, the fall in overnight stays was reduced to 45% compared to July 2019.

The decrease in the arrival of tourists has also had a significant impact on the Balearic retail trade and it is the region that saw the sharpest decline in the corresponding National Statistics Institute (INE) indicator in 2020 (–14.1% vs. –5.6% in Spain). Nevertheless, a significant recovery in consumption is being observed following the lifting of restrictions; the CaixaBank consumption indicator shows that in September, card spending was 4.8% higher than it was in 2019.

The industrial sector has also been hit harder by the current crisis than Spain on average. Balearic industrial production fell by 20.9% in 2020 (–9.2% on average in Spain) and, in the first seven months of 2021, it has still suffered a 18.3% decline compared to the same period in 2019 (–4.1% on average in Spain).

CaixaBank consumer index

Last actualization: 08 November 2021 - 09:14

Tourist overnight stays

Last actualization: 08 November 2021 - 09:12

Table of indicators

 

 

2002-2007 average

2008-2014 average

2015-2018 average

2019

2020

2021

Latest figure

Activity and prices

Real GDP*
(% year-on-year change)

2.8

–0.7

3.5

1.7

–23.0

2020

3.5

–1.3

2.8

2.0

–10.8

Retail trade**
(% cumulative annual change)

–2.4

3.2

2.6

–14.1

–10.0

July-21

–3.7

1.8

2.5

–5.6

–3.4

Industrial production index**
(% cumulative annual change)

1.2

–6.8

–1.0

–6.3

–20.9

–18.3

July-21

1.9

–4.2

1.7

0.6

–9.2

–4.1

Service activity index**
(% cumulative annual change)

–1.1

6.6

1.2

–37.8

–34.5

June-21

–3.4

5.5

3.9

–15.6

–6.9

Consumer price index
(% year-on-year change)

3.0

1.4

1.2

0.5

–0.3

3.0

July-21

3.1

1.4

1.1

0.7

–0.3

2.9

                 

Labour market

Registered employment affiliated to Social Security**
(% year-on-year change)

3.1

–1.6

5.0

2.3

–9.3

–6.2

August-21

3.5

–2.3

3.4

2.6

–2.1

0.8

Unemployment rate
(% active population)

7.9

19.4

13.9

11.8

16.2

15.2

Q2 2021

10.0

20.8

18.5

14.1

15.5

15.3

Unemployment rate for under 25s
(% active population < 25)

17.1

40.4

35.5

29.4

42.0

43.4

Q2 2021

20.4

44.5

41.5

32.6

49.6

38.4

                 

Public sector

Public deficit
(% of GDP)

–1.5

–3.2

–0.6

–0.6

0.2

2020

–0.3

–2.5

–0.8

–0.6

–0.2

Autonomous Communities public debt
(% of GDP)

5.3

18.5

28.9

26.2

29.9

29.9

Q1 2021

6.0

13.8

24.5

23.7

27.1

27.6

                 

Real estate market

Housing prices
(% year-on-year change)

–6.1

7.2

6.0

4.1

5.7

Q2 2021

–6.8

5.8

5.1

2.1

3.3

Housing sales
(% cumulative annual change)

–4.7

13.9

–11.1

–23.3

9.0

June-21

–8.7

13.4

–2.4

–17.2

31.8

                 

Foreign sector and tourism

Exports of goods**
(% cumulative annual change)

5.5

–7.5

18.6

–4.6

–12.9

–8.0

June-21

6.8

4.2

4.5

2.0

–10.2

2.8

Tourist overnight stays**
(% cumulative annual change)

0.9

0.6

2.5

–2.7

–89.1

–69.3

July-21

2.4

1.1

3.4

0.6

–69.3

–63.9

Notes: *The 2020 GDP figure for Autonomous Communities is an estimate made by CaixaBank Research. ** The changes from the same period in 2019 are calculated.

Source: CaixaBank Research, based on data from the National Statistics Institute (INE), the Bank of Spain, the Ministry of Labour, Migration and Social Security (MITRAMISS), the Ministry of Finance and DataComex.

Regional comparison

Below we show a series of charts comparing the main indicators for the various regions.

Regional comparison

Last actualization: 27 October 2021 - 10:31