Mallorca coronavirus: economy of the Balearics

Coronavirus pandemic caused 20-year setback in Balearic economy in just 9 months and the islands are likely to be one of the hardest hit places in Europe and possibly the world.

Balearic government cut forecast for gross domestic product from 28.8% to 25.4%, which means that the wealth per capita of the citizens of the islands will increase from 28,143 euros in 2019 to 20,994 at the end of this year, which corresponds roughly to the year 2000.

Global decline

In terms of global GDP, the drop is 14 years, which means that the economy of the Balearic Islands would return to what it was in 2006.

At the end of 2019, the overall wealth of the Balearic Islands stood at 33,716 million euros, but this year it will drop to 25,152 million.

The GDP per capita decreases further because the wealth of the Community is divided by the number of inhabitants and when the population of the Balearic Islands increases the GDP decreases.

The gloomy economic forecast for the Balearic Islands has been approved by the Independent Authority for Tax Responsibility, or AIReF, a reputable public accounts control body which subscribes to the Government’s forecasts.

Autonomous communities

The AIReF has not yet calculated how all the Autonomous Communities will end the year, but it presented statistical data on the decline in wealth until September. He found a drop of 21.3% in the Balearic Islands and 13.4% in the Canary Islands, against a drop of 5% in Cantabria, Castilla y León and Galicia and 4.3% in Murcia.

The difference in the decline in GDP has completely changed the ranking of the richest and poorest communities, especially for the Balearic Islands which were sixth in Spain in March 2020 and six months later collapsed at number 11.

The three richest communities in the country are Madrid, the Basque Country and Navarre. Andalusia replaces Extremadura as the poorest community in Spain, followed closely by the Canary Islands.