Balearic Islands
The Balearic Islands is one of the most dynamic regions in the country. According to CaixaBank Research, the Balearic Islands’ GDP will grow by 3.2% in 2024, above the Spanish average (2.8%). This is thanks to the upturn in tourism, which, in turn, is boosting job creation.
- The Balearic Islands, with 1.23 million inhabitants, 2.5% of the national total, is the twelfth-largest region in demographic terms. It is the second youngest region, as only 16.7% of its population is over 65 years old (national average of 20.4%).
- 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.
- Its GDP per capita is 29,603 euros, ranked in sixth place, 5.1% above 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 (7.3%) is the second lowest of all regions, with its main exports being chemical products (41% of the total) and energy products (fuel for aircraft and ships, 19%). However, exports of tourism services are especially notable: in 2023, foreign tourists spent a total of 17.692 billion euros in the Balearic Islands, 16.3% of their total spending throughout Spain. Moreover, tourism directly and indirectly contributed more than 40% of the Balearic Island’s total GDP.
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 |
1,210 |
||
|
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 |
||
|
|
The Balearic Islands is one of the most dynamic regions in the country. According to CaixaBank Research, the Balearic Islands’ GDP will grow by 3.2% in 2024, above the Spanish average (2.8%). This is thanks to the upturn in tourism, which, in turn, is boosting job creation.
Despite our forecasts pointing to a slowdown in 2025, with GDP rising by 2.4%, it will remain above the Spanish average (2.3%). Although the tourism industry will continue to be the main driver of growth, the upswing will gradually run out of steam, which explains the slowdown in activity. There are also problems with overcrowding and a shortage of labour. Other challenges faced by the region include problems with access to housing and stagnating productivity. On a positive note, falling interest rates and easing inflation will boost household spending.
The Balearic Islands are the region with the best-performing labour market. In 2023, the number of registered workers affiliated to Social Security rose by 4.8% (2.7% on average across Spain). This year it has lost some of its momentum, although it remains above average (3.4% year-on-year in September vs. 2.3%), mostly thanks to the upturn in employment in administrative activities, healthcare and education. In terms of the unemployment rate, which is highly seasonal, it stood at 8.0% in Q2 2024, 3.3 points below the Spanish average and well below the usual figure for Q2 2024 (13.9% on average in 2014-2019).
Now that the pandemic is over, tourism is seeing a huge boost. In 2023, total overnight stays (domestic and foreign tourists) and, above all, the number of foreign tourists arriving on the islands, exceeded 2019 levels. This year - with figures up to August - the positive trend has continued and, in the case of foreign tourists, record highs have been achieved: 11.2 million visitors, spending 14.671 billion euros, up 6.2% and 13.2% year-on-year, respectively (10.1% and 32.3% compared to the same period in 2019).
Thanks to this boost from tourism, the region saw the highest rise in consumption in 2023: the volume of retail trade sales grew by 5.9% (2.9% in Spain). Although this year has seen a sharp slowdown, with a year-on-year decline of 0.5% up to August (1.6% in Spain), it is well above 2019 levels, by 7.5% (3.7% on average nationwide).
There has been a sharp correction in activity in the housing market in recent years. The Balearic Islands has seen the biggest fall in housing sales of all regions (–20% in 2023 and –17% year-on-year in the first half of 2024); it should be noted that foreign buyers play a key role in this market (accounting for just over 30% of all sales), which is preventing an even more pronounced decline. In terms of prices, the market has again tightened and prices are growing at a fast pace, but without reaching the double-digit figures recorded in 2022 (5.3% year-on-year in Q2 2024).
Table of indicators
|
|
2008-2013 average |
2014-2019 average |
2020 |
2021 |
2022 |
2023 |
2024 |
Latest figure |
|
|
Activity and prices |
Real GDP* |
–1.4 |
3.2 |
–23.1 |
11.6 |
12.5 |
4.0 |
2023 |
|
|
–1.7 |
2.8 |
–10.9 |
6.7 |
6.2 |
2.7 |
||||
|
Retail trade |
–3.4 |
3.5 |
–14.1 |
9.2 |
8.7 |
5,9 |
–0.5 |
August-24 |
|
|
–5.2 |
2.3 |
–5.2 |
3.6 |
0.8 |
2.9 |
1.6 |
|||
|
Industrial production index |
–8.0 |
–1.6 |
–20.9 |
11.2 |
12.4 |
–1.2 |
–6.6 |
August-24 |
|
|
–5.3 |
1.8 |
–9.2 |
7.1 |
2.5 |
–1.4 |
0.4 |
|||
|
Service activity index |
–2,3 |
5.6 |
–37.8 |
70.6 |
21.0 |
14.2 |
6.9 |
July-24 |
|
|
-4.6 |
5.1 |
–15.6 |
22.0 |
18.3 |
2.2 |
3.0 |
|||
|
Consumer price index |
1.7 |
0.8 |
-0.3 |
3.3 |
8.1 |
3.9 |
2.3 |
August-24 |
|
|
1.7 |
0.7 |
-0.3 |
3.1 |
8.4 |
3.5 |
2.3 |
|||
|
Labour market |
Registered workers affiliated to Social Security |
–2.5 |
4.5 |
–9.3 |
2.5 |
10.7 |
4.8 |
3.4 |
September-24 |
|
-3.1 |
3.2 |
-2.1 |
2.5 |
3.9 |
2.7 |
2.3 |
|||
|
Registered workers affiliated to Social Security not affected by furlough |
–2.5 |
4.5 |
–25.0 |
14.7 |
19.0 |
5.8 |
3.7 |
September-24 |
|
|
-3.1 |
3.2 |
–9.2 |
7.3 |
7.3 |
3.4 |
2.5 |
|||
|
Unemployment rate |
19.3 |
14.6 |
16.2 |
14,4 |
10.7 |
10.5 |
8.0 |
Q2 2024 |
|
|
20.2 |
18.8 |
15.5 |
14.9 |
13.0 |
12.2 |
11.3 |
|||
|
Unemployment rate for under 25s |
39.3 |
36.5 |
42.0 |
34.0 |
23.9 |
21.3 |
24.0 |
Q2 2024 |
|
|
42.5 |
42.5 |
38.3 |
44.5 |
24.4 |
28.8 |
26.6 |
|||
|
Public sector |
Public deficit |
-3.3 |
-0.8 |
0.2 |
1.0 |
0.1 |
0.4 |
-2.2 |
Q2 2024 |
|
–2.7 |
–0.9 |
-0.2 |
0.0 |
–1.1 |
–0.9 |
–1.0 |
|||
|
Autonomous Communities public debt |
16.8 |
28.6 |
34.5 |
29.7 |
24,5 |
21.7 |
21.5 |
Q2 2024 |
|
|
12.3 |
23.9 |
26.9 |
25.3 |
23.1 |
21.7 |
21.9 |
|||
|
Real estate market |
Housing prices |
–7.5 |
6.8 |
4.1 |
5.8 |
9.2 |
4.1 |
6.2 |
Q2 2024 |
|
–8.1 |
5.3 |
2.1 |
3.7 |
7.4 |
4.0 |
7.8 |
|||
|
Housing sales |
–8.7 |
8.5 |
–23.3 |
32,6 |
25.7 |
–20.4 |
-12.8 |
July-24 |
|
|
–10.8 |
9.7 |
–16.9 |
34.8 |
14.8 |
–10.2 |
-1.3 |
|||
|
Foreign sector and tourism |
Exports of goods |
–10.8 |
14.8 |
–11.8 |
10.4 |
45.3 |
-8.3 |
4.3 |
July-24 |
|
4.6 |
3.9 |
–9.4 |
20.1 |
22.9 |
–1.4 |
–0.9 |
|||
|
Tourist overnight stays |
1.5 |
1.6 |
–88.8 |
301.7 |
111.9 |
5.1 |
7.3 |
August-24 |
|
|
0.7 |
3.0 |
–69.2 |
78.3 |
73.3 |
7.1 |
5.0 |
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.