According to the Economic Outlook Report from the Government of the Balearic Islands, the region’s economy grew by 3.4% year-on-year in the first quarter of 2025, outperforming the national average (+2.8%) and the EU average (+1.6%). Mallorca led the growth with +3.6%, followed by the Pitiusas (+3.3%) and Menorca (+1.7%).

All sectors experienced growth, especially services (+3.8%). Social Security affiliation reached record highs in May with 638,590 affiliates, representing a 2.6% year-on-year increase.

Tourist spending hit a record €3.094 billion by April, with an average daily expenditure per person of €170, especially rising in the Pitiusas (+20.4%). Tourist arrivals increased 8.1%, except from the UK (-8.5%) and Belgium (-1.3%).

Industrial production rose 8.3%, and the trade balance showed a surplus of €223.5 million. Despite declines in housing starts and completions, the construction sector remains strong, with a 38.1% increase in approved housing projects.

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Balearic Islands’ Economy Grows 3.4% in Q1 2025, Marking Five Consecutive Quarters Above 3%

The report highlights human capital as a key challenge. Although 45% of people aged 25–34 hold higher education degrees—meeting the EU 2030 Education Framework target—Baleares has the highest early school dropout rate in Spain (20.1%), far above the national average (13%) and EU average (9.3%). The gap is particularly wide between men (27.9%) and women (11.9%).

The region also faces a high rate of job overqualification (36.5%), as its tourism-driven economy generates strong demand for low-skilled jobs, often luring young people into the labor market before completing their studies.