Balearic Islands
The Balearic Islands is the most dynamic region in Spain, in step with the complete reopening after the pandemic. According to CaixaBank Research, the Balearic Islands’ GDP grew by 3.8% in 2023, above the Spanish average (2.5%) and recovered pre-crisis levels. The boom in tourism drove job creation and consumer spending.
- The Balearic Islands, with 1.21 million inhabitants, 2.5% of the national total, is the twelfth-largest region in demographic terms. It is the second youngest region, as only 16.5% of its population is over 65 years old (national average of 20.1%).
- With a GDP of 35.465 billion euros, it also ranks 12th among the autonomous communities, and makes up 2.6% of Spain’s GDP.
- The total GDP per capita is 29,603 euros, putting it in sixth position and 5.1% higher than the Spanish average. Despite strong economic growth, over recent years this has dropped below the average due to the sharp increase in its population.
- The Balearic Islands’ productive sectors are notable for the higher relative importance of trade, transportation, hotels and restaurants, and leisure (40.8% of the region’s GDP, 12 points higher than in Spain) and construction (6.9% vs. 5.4%). In contrast, it is the region with the lowest proportion of the manufacturing industry (2.7% vs. 12.5%).
- In line with the less prominent role played by industry, the proportion of exports of goods in the Balearic Islands’ GDP (73%) is the second lowest of all regions, the main exports being chemical products (41% of the total) and energy products (19%): fuel for aircraft and ships. However, exports of tourism services are especially notable: in 2022, foreign tourists spent a total of 15.222 billion euros in the Balearic Islands, 17.5% of their total spending throughout Spain. Moreover, the direct and indirect average contribution of tourism to the Balearic Islands’ GDP stood at over 40% during 2016-2019 (it dropped to 14% in 2020).
Table of structural indicators
| 1992 | 2002 | 2012 | 2022 | |||
GDP per capita | Euros | 12,038 | 21,793 | 23,523 | 29,603 | ||
100 = Spain | 123.0 | 120.4 | 106.7 | 105.1 | |||
Population | Thousands of inhabitants | 732 | 883 | 1,105 | 1,207 | ||
Average annual growth over the decade (%) | 0.9 | 1.9 | 2.3 | 0.9 | |||
% of total in Spain | 1.9 | 2.1 | 2.4 | 2.5 | |||
% of population > 65 years old | 14.2 | 14.3 | 14.6 | 16.5 | |||
Exports of goods as a proportion of GDP | % | … | 6.4 | 3.9 | 7.3 | ||
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The Balearic Islands is the most dynamic region in Spain, in step with the complete reopening after the pandemic. According to CaixaBank Research, the Balearic Islands’ GDP grew by 3.8% in 2023, above the Spanish average (2.5%) and recovered pre-crisis levels. The boom in tourism drove job creation and consumer spending.
Although our forecasts indicate a sharp slowdown in 2024, with an increase in GDP of 2.0%, it will continue to be well above the Spanish average (1.4%). The less buoyant level of activity that we expect is mainly explained by economic contraction across the euro area, the waning of the tourism sector’s recovery and the decline in activity of the construction sector.
The Balearic Islands is the region with the best labour market performance. In December 2023, the number of registered workers affiliated to Social Security increased by 3.3% year-on-year (2.7% average in Spain), thanks to the upturn in employment in healthcare, transportation, and hotels and restaurants; therefore, the total volume of registered workers affiliated to Social Security is well above the January 2019 level (8.5% vs. 7.4% in Spain). In terms of the unemployment rate, which is characterised by its high seasonality, it stood at 11.4% in Q4 2023, 4 points below the Spanish average, but 1.5 points above that recorded in Q4 2019.
Now that the pandemic is over, tourism is seeing a huge boost. In 2023, according to the figures up to November, total overnight stays (national and foreign tourists) and, above all, the number of foreign tourists arriving on the islands, exceeded 2019 levels by 0.9% and 5.1%, respectively (1.9% and 0.8% in Spain). The number of foreign tourists hit a record high: 14.2 million, spending 17.500 billion euros, representing a growth of 19.1% compared to 2019 (16.9% nationwide).
Thanks to the renewed momentum in tourism, consumption on the islands was barely affected by inflationary pressures in 2022, while in 2023, it was the region with the biggest increase in the retail trade index (in volume), standing at 12.0% year-on-year until November (7.7% in Spain); therefore, it far exceeds the levels in 2019 (9.7% vs. the national average of 3.0%).
Activity in the residential market saw a sharp decline in 2023: after the upturn in housing sales in 2022 (26%), the biggest regional decline was in the Balearic Islands (–20%
year-on-year until October), which would have been greater had it not been for foreign purchasers (responsible for just over 30% of the total). Prices also dropped (4.5% year-on-year in Q3 2023 vs. 10% in the first half of 2022), although the shortage in supply prevented an even bigger drop.
Table of indicators
| 2008-2013 average | 2014-2019 average | 2020 | 2021 | 2022 | 2023 | Gap with 2019 (latest figure) | Latest figure | |
Activity and prices | Real GDP * | –1.4 | 3.2 | –23.1 | 11.6 | 12.5 | 3.8 | 0.2 | 2023 |
–1.8 | 2.8 | –11.2 | 6.4 | 5.8 | 2.5 | 2.5 | |||
Retail trade | –3.4 | 3.5 | –14.1 | 7.0 | 6.9 | 12.0 | 12.3 | November-23 | |
–4.6 | 2.3 | –5.6 | 2.6 | –1.0 | 7.7 | 4.8 | |||
Industrial production index | –8.0 | –1.6 | –20.9 | 11.2 | 13.5 | –0.7 | 10.3 | November-23 | |
–5.3 | 1.8 | –9.2 | 7.1 | 2.4 | –0.6 | 2.9 | |||
Service activity index | –2.3 | 5.6 | –37.8 | 21.8 | 42.5 | 13.6 | 27.1 | November-23 | |
–4.6 | 5.1 | –15.6 | 15.8 | 19.9 | 2.7 | 24.5 | |||
Consumer price index | 1.7 | 0.8 | –0.3 | 3.3 | 8.1 | 3.3 | 15.6 | December-23 | |
1.7 | 0.7 | –0.3 | 3.1 | 8.4 | 3.1 | 15.5 | |||
Labour market | Registered workers affiliated to Social Security | –2.5 | 4.5 | –9.3 | 2.5 | 10.7 | 3.3 | 8.5 | December-23 |
–3.1 | 3.2 | –2.1 | 2.5 | 3.9 | 2.7 | 7.4 | |||
Registered workers affiliated to Social Security not affected by furlough | –2.5 | 4.5 | –25.0 | 14.7 | 19.0 | 3.6 | 8.8 | December-23 | |
–3.1 | 3.2 | –9.2 | 7.3 | 7.3 | 3.2 | 8.4 | |||
Unemployment rate | 19.3 | 14.6 | 16.2 | 14.9 | 11.0 | 11.4 | –– | Q4 2023 | |
20.2 | 18.8 | 15.5 | 14.8 | 12.9 | 11.8 | –– | |||
Unemployment rate for under 25s | 39.3 | 36.5 | 42.0 | 33.7 | 24.1 | 24.1 | –– | Q4 2023 | |
42.5 | 42.5 | 38.3 | 44.7 | 23.9 | 28.4 | –– | |||
Public sector | Public deficit | –3.3 | –0.8 | 0.2 | 1.0 | 0.1 | 1.0 | –– | Q3 2023 |
–2.7 | –0.9 | –0.2 | 0.0 | –1.1 | –0.1 | –– | |||
Autonomous Communities public debt | 16.9 | 28.8 | 34.8 | 29.3 | 26.2 | 24.6 | –– | Q3 2023 | |
12.3 | 24.1 | 27.2 | 25.6 | 23.6 | 22.3 | –– | |||
Real estate market | Housing prices | –7.5 | 6.8 | 4.1 | 5.8 | 9.2 | 4.5 | 24.9 | Q3 2023 |
–8.1 | 5.3 | 2.1 | 3.7 | 7.4 | 4.5 | 19.1 | |||
Housing sales | –8.7 | 8.5 | –23.3 | 32.6 | 25.7 | –19.6 | –16.7 | November-23 | |
–10.8 | 9.7 | –16.9 | 34.8 | 14.8 | –9.3 | 20.5 | |||
Foreign sector and tourism | Exports of goods | –10.8 | 14.8 | –11.8 | 10.4 | 45.3 | –8.8 | 3.7 | November-23 |
4.6 | 3.9 | –9.4 | 20.1 | 22.9 | –0.7 | 40.9 | |||
Tourist overnight stays | 1.5 | 1.6 | –88.8 | 301.7 | 111.9 | 5.5 | 5.7 | November-23 | |
0.7 | 3.0 | –69.2 | 78.3 | 73.3 | 7.1 | 4.4 |
Note: *The 2023 GDP figure for Autonomous Communities is an estimate made by CaixaBank Research.
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.
Below we show a series of charts comparing the main indicators for the various regions.