The economy of the Balearic Islands accelerated its growth in the third quarter of 2024, with a year-on-year increase in Gross Domestic Product (GDP) of 3.2%, according to the latest Economic Outlook report from the Directorate General of Economy and Statistics. This growth affected all islands and sectors, with the services sector standing out as the main driver of economic expansion in the region.

The Director General of Economy and Statistics, Catalina Barceló, and the Vice President of the Govern, Antoni Costa, during the presentation of the latest Economic Outlook report of the Balearic Islands. Photo: CAIB.

Growth by Islands and Sectors

  • Mallorca: growth of 3.3%.
  • Menorca: increase of 2.7%.
  • The Pitiüses: growth of 2.5%.

All economic sectors reported growth:

  • Services: +3.7%.
  • Primary sector: +1.8%.
  • Industry: +1.2%.
  • Construction: +0.7%.

Labour Market

The increase in economic activity translated into a significant rise in employment across all sectors. In November 2024, the average number of affiliates reached 509,864. The sectors with the highest growth in affiliation were:

  • Services: +4% (over 400,000 affiliates).
  • Construction: +2.2% (62,441 affiliates, a historic record).
  • Industry: +1.8% (over 30,000 affiliates).

Inflation and Turnover

  • Inflation: +2.8% (core inflation: +2.9%).
  • Services sector turnover: +6.6%, far above the national figure of 2.6%.
  • Retail trade sales: +0.5%.

Tourism

Tourism remains a cornerstone of the Balearic Islands’ economy:

  • Tourist spending: €21.695 billion by October (+12.1% compared to 2023).
  • Average tourist spending per day: €190 (a historic high).
  • Number of tourists: 18.1 million by October (+4.7%).
  • Overnight stays: +3.9% (6.3 average days of stay).
  • Air traffic: +5.5%; maritime traffic: -1%.

Industrial Sectors and External Trade

  • Industrial production: increasing.
  • Trade balance: surplus of €731.2 million (+7.5%).
  • Construction: increase in approved projects (+35% in free housing starts).
  • Price of free housing: +5.8% in the third quarter.

Challenges and Housing Policies

The report also highlights the housing challenge in the Balearic Islands, underscoring the rapid population growth:

  • Population growth (2001-2023): +46.3% (compared to +18.7% nationally).
  • Housing stock growth (2002-2023): +31.2% (compared to +27.9% nationally).
  • Average transaction price (2008-2023): +59.5% (compared to -2.9% in Spain).

The Vice President of the Govern, Antoni Costa, highlighted the importance of the recovery of new construction in the Balearic Islands. “New construction is recovering in the Balearic Islands, and this is good news,” he stated, adding that in the coming years there will be a significant increase in the housing supply, enabling more people to access housing. Meanwhile, Catalina Barceló, Director General of Economy and Statistics, emphasised the challenges surrounding housing and noted that “all the housing policies undertaken by the Balearic Government have a single objective: to increase supply.”