Spain | Balearic Islands Economic Outlook 2020

Summary

The GDP of the Balearic Islands may shrink by 20% this year and grow by 10.5% in 2021, losing 35,000 jobs. The impact of the crisis was heterogeneous during the first semester, as with the recovery. Public policies allow for less job destruction, but risks push the perspectives downward.

Key points

• Key points:
• The drop in activity this year is explained by the collapse of tourism due to the pandemic, the prolongation of containment measures for a longer period than expected, and the maintenance or recovery of some restrictions affecting domestic demand.
• The impact by gender or age in this crisis was different from what was observed in 2008: women and those over 35 have been more affected.
• The Balearic Islands is the region in which policies to maintain employment have been most noticeable.
• By the end of 2021, the GDP of the Balearic Islands could be 11.6% below the 2019 level.
• The development of a vaccine, the rapid use of NGEU funds and associated structural reforms could lead to more positive scenarios.

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