BBVA forecasts the Balearic Islands economy growth at twice as fast as the national economy by 2023 thanks to tourism

BBVA forecasts growth of 3.1% for the Balearic economy this year. The bank warns of the possibility of a slowdown in tourism

BBVA forecasts growth of 3.1% in the Balearic Islands economy in 2023. A forecast from the bank’s economic studies department that would allow the community to double the growth forecast for the Spanish economy, as already happened in 2022. According to the bank, some 39,000 jobs will also be created in two years.

The GDP is the highest of all the autonomous communities

The bank’s economic research department has revised upwards the GDP growth of the past 2022, placing it as the highest of all the autonomous communities with 10.7%. In fact, the archipelago was the only Spanish region to have grown by more than 10% in the last two years. Although a slowdown in growth was noted in the second half of last year, it will continue on an upward path of around 3% for this year, falling to 2% in the following years.

Cala Deiá. Foto: Jaume Capellà (Arxiu AETIB).

Good economic outlook but with risks

Despite the good economic outlook, BBVA warns of a series of risks that the Balearic economy has to take into account. In addition to inflation, it is necessary to consider the drop in the purchasing power of families, which could accelerate disinvestment processes. He also foresees a possible slowdown in the tourism sector.

Slowdown in house purchases

The chief economist of BBVA Research, Daniel Cardoso, has also spoken of a slowdown in house purchases. In fact, he referred to the difficulties in accessing the property market and defended the need for the Balearic Islands to promote a great pact for affordable housing that will allow human capital to be attracted.

Cardoso advocates promoting a census that includes all unused housing in the community. However, according to Cardoso, the homes in the hands of the banks are not in places where people want to live. For the economist, before attempting a legislative change to prohibit the purchase of housing by foreigners, it is much more feasible to tax second homes.