The recent strengthening of the euro against the dollar and currencies like the Norwegian krone is having a direct impact on southern Gran Canaria, one of the Canary Islands' tourism hubs. The euro has surpassed $1,2 for the first time in three years, and in just ten days has gained almost a full krone against the Norwegian currency, reaching NOK 12,13 per euro.
This phenomenon has two consequences for the island's economy. On the one hand, the south of Gran Canaria may lose its appeal as a destination for tourists from northern Europe, who seek to maximize their purchasing power in countries with strong currencies.
The strengthening of the euro also makes imports from countries with weaker currencies, such as Norway, more expensive, affecting sectors such as hospitality and construction, which depend on foreign inputs. "The cost of several basic products has skyrocketed in just a few weeks," the hotel industry association notes. "From cereals to technological products, they are paying more in euros for the same things."
Added to this is imported inflation, especially in the food sector, where prices have risen 8,7% compared to last year in Nordic countries, according to the Norwegian consumer price index. Although inflation in the Canary Islands remains somewhat more contained, increases in the cost of living are beginning to be felt in supermarkets and tourist services.
In this context, southern Gran Canaria walks a fine line between a tourist boom and rising operating costs, in an economy increasingly exposed to the fluctuations of the international currency market.
