The Balearic economy is growing twice as fast as Europe's, but housing prices are generating social exclusion.

PalmThe gross added value (GVA) of the Balearic Islands' economy grew by 3.4% in the first quarter of 2025 compared to the same period in 2024, above the 2.8% increase in the country as a whole and the 1.6% increase in the European Union. These figures were considered "enviable" by Vice President Antoni Costa, although he also admitted that the high price of housing is the "greatest factor of social exclusion," according to EFE.

The Director General of Economy and Statistics, Catalina Barceló, indicated that all economic sectors grew between January and March 2025. The services sector grew by 3.8%; the industry and energy sector by 2.1%; the construction sector by 1.1%; and the agriculture and fishing sector by 0.7%. Despite highlighting the dynamism of the islands' economy, Costa also pointed to another structural problem facing the archipelago, which involves increasing the per capita income of residents. "The Balearic Islands need to generate higher-value jobs with higher salaries," he noted: "This is the structural change we need in the islands."

He also acknowledged the need to expand the housing supply. "We have people living in caravans, with jobs but homeless. This is the reality," he continued: "We have to ensure that the economy generates higher-value and higher-skilled jobs, contain growth in volume, and focus on value." Furthermore, Barceló noted that inflation is moderate due to the drop in fuel prices: last May it was 2.4% in the islands and 2% in Spain.