between january and july 2006 the island´s GDP increased by 2.1%

Menorca´s economic growth is slower than Balearics or Spain

During the first six months of the year the slight increase in tourism and the strength of the construction sector have helped to ensure growth of the GDP

C.M.W..Maó

Initial indications contained in CAEB´s economic report suggest that the island´s economy is once again growing, but at a slower pace than that of the Balearics, Spain or Europe. Menorca´s gross domestic product figure is 2.1% higher than in 2005, 0.6% lower than the Balearic average.

The services sector has shown a 1.1% growth, compared to 0.3% in 2005, thanks to the slight increase in tourist figures (the numbers of British, German and Spanish visitors rising by 4.4%, 8.8% and 13.4% respectively). Construction is also showing positive signs with a growth of 3.1% (marginally higher than last year´s increase of 3%), helping to maintain industrial growth at 0.9%. The primary sector continues to grow at a fairly consistent rate, 1.4% this year compared to 1.3% in 2005.

Construction, the sector in which the number of contracts has risen by 4.3%, is still benefiting from projects started in previous years. This fact plus the restrictions placed on construction by recent legislation means that the sector is an unknown quantity in Menorca although there are no indications of a future slump in the sector, according to Gabriel Pons, the head of CAEB (the Confederation of Associations for Balearic Businesses).

Menorca/UK relationship

An interesting and significant fact revealed in the report is the relationship between the GDP performance in Menorca and the United Kingdom and the sterling exchange rate. Since 2002 the GDP for the two places has run virtually in parallel (as shown above), linked to the performance of the pound sterling.