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.

Content available in
February 1st, 2024
Illes Balears
1,210,000
inhabitants (2022)
€29,603
GDP per capita (2022)
2.6%
of Spanish GDP (2022)
2.0%
anticipated growth in GDP (2024)
Regional economic structure and position
  • 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

 

 
Macroeconomic situation

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.

GDP

Last actualization: 01 February 2024 - 14:04

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.

 

Retail trade

Last actualization: 01 February 2024 - 15:30

Overnight stays

Last actualization: 01 February 2024 - 15:30

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 *
(% year-on-year change)

–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
(% cumulative annual change)

–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
(% cumulative annual change)

–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
(% cumulative annual change)

–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
(% year-on-year change)

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
(% year-on-year change)

–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
(% year-on-year change)

–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
(% working population)

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
(% working population < 25)

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
(% of GDP)

–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
(% of GDP)

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
(% year-on-year change)

–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
(% cumulative annual change)

–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
(% cumulative annual change)

–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
(% cumulative annual change)

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.

Regional comparison

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

Regional comparison

Last actualization: 28 February 2024 - 14:55