EU economy: analysis of statistics for 2020 and forecast for 2021

March 17, 2021
Economy of the European Union: GDP dynamics of states in 2020 and forecast for 2021
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GDP of the European Union declined by 6.3% at the end of 2020, while the GDP of the eurozone declined by 6.6%. If we compare the region’s economic results quarter by quarter, we can see the impact of the pandemic and the limitations associated with it. We tell you what was happening to the region’s and individual economies in 2020 and what results are projected for 2021.

In 2020, the economic situation in the European Union was developing according to the principle of a seesaw: the decline was replaced by growth depending on the epidemic situation in the region.

Due to the coronavirus pandemic, companies closed for quarantine, and states stopped air links with other countries. International tourism for the year decreased by 74% compared to 2019 – this data is given by the UN World Tourism Organization.

In March 2020, Eurostat published a report with quarterly GDP dynamics of the European Union and the eurozone, a region of 19 countries that use the euro as their main currency.

GDP dynamics of the European Union and the eurozone in 2020

EU and eurozone GDP: 2020 quarterly results in annualized ratio to 2019
Percentage shows the ratio of quarterly results compared to the previous quarter
Source: Eurostat, march 2021

If we compare the region’s economy with pre-crisis figures for the same quarter of 2019, the dynamics of EU and eurozone GDP will be negative.

The ratio of EU and eurozone GDP in 2020 to 2019 results

EU and eurozone GDP: 2020 quarterly results in annualized ratio to 2019
Percentage shows the ratio of quarterly results compared to the same quarter in 2019
Source: Eurostat, march 2021

What Happened to Economies with Residence Permit Programs by Investment in 2020

The economic situation in different countries developed unevenly. The rate of decline and growth depended on how the state-supported businesses and people during the crisis. The countries, whose GDP is significantly dependent on revenues in the tourism sector, suffered most of all.

Five European countries with residence permits by investment programs reached positive GDP figures by the end of 2020. The best results over the past three months have Malta, Greece and Cyprus.

For comparison, the table shows the performance of the region’s economic leaders, Germany, France and Spain.

GDP dynamics compared to the previous quarter

Country Q1 2020 Q2 2020 Q3 2020 Q4 2020
Malta -2,4% -14,2% +8,0% +3,8%
Greece +0,4% -13,4% +3,1% +2,7%
Cyprus -0,5% -13,1% +8,9% +1,4%
Spain -5,3% -17,9% +16,4% +0,4%
Germany -2% --9,7% +8,5% +0,3%
Portugal -4,0% -13,9% +13,3% +0,2%
France -5,9% -13,5% +18,5% -1,4%
Austria -3,0% -10,7% +11,8% -2,7%

Economic growth in the second half of 2020 did not compensate for the overall decline amid the pandemic. By the end of the year, countries had failed to reach the pre-crisis indicators of 2019 and the dynamics remained negative.

GDP dynamics compared to the same quarter of 2019

Country Q1 2020 Q2 2020 Q3 2020 Q4 2020
Malta +2,1% -14,6% -8,6% -6,2%
Greece +0,1% -13,8% -10,5% -7,9%
Cyprus +1,4% -12,6% -4,7% -4,5%
Spain -4,2% --21,6% -9% -9,1%
Germany -2,2% -11,3% -4% -3,6%
Portugal -2,2% -16,3% -5,7% -6,1%
France -5,6% --18,6% -3,7% -4,9%
Austria -3,6% -13,6% -3,8% -5,9%

When the pre-crisis indicators return

The European Commission predicts that the region’s economy will grow in 2021-2022. But the rate of recovery depends on three factors:

  • The speed of coronavirus vaccination;

  • The fulfilment of the terms of the trade agreement with Britain;

  • The amount of financial aid to European Union countries.

Whether the projected growth will compensate for the losses due to the crisis and the pandemic is still unknown. We talked about this in the article “What will happen to the EU economy in 2021”.

GDP growth forecast for 2021-2022

Region, Country 2021 year 2022 year
EU +3,7% +3,9%
Spain +5,6% +5,3%
France +5,5% +4,4%
Malta +4,5% +5,4%
Portugal +4,1% +4,3%
Greece +3,5% +5%
Cyprus +3,2% +3,1%
Germany +3,2% +3,1%
Austria +2% +5,1%

Malta, Portugal and Greece are the most attractive countries for investment in the next two years. In 2021, these economies will grow more than the regional average. And in 2022, the growth rate will accelerate.

Experts-analysts investment programs Immigrant Invest recommend not to postpone participation in the residence permit and permanent residence permits in the second half of 2021.

Together with the growth of the economy will increase prices for investments: real estate, securities, and business. While the economy is just beginning to recover, investors will buy better facilities at a lower cost.

A permanent residence permit in Malta is issued by the investment of €112,000 or more. To become a resident of the country, the investor meets four conditions:

  1. Buys or rents a house on the island.
  2. Pay the administrative fee and the government fee.
  3. Makes a donation to a local non-profit organization.
  4. Confirms the existence of assets worth €500,000 or more.

A residence permit in Portugal is obtained by 1 of 8 different options, for example by purchasing real estate or units in investment funds, opening a deposit in a local bank, opening a company in the territory of Portugal. The minimum investment amount is €250,000.

A residence permit in Greece is granted by purchasing real estate worth €250,000 and more. Program participants buy housing or facilities for commercial use, renting hotels and tourist apartments for at least 5 years, buy plots of land for construction. Another option for obtaining a Greek residence permit – open a deposit in a bank or buy shares of local companies worth €400,000.

Permanent residence in Cyprus is issued to investors who buy housing in the amount from € 300,000. Under the terms of the program is allowed to buy only new real estate. Objects are allowed to rent.

In Austria, residence permits for financially independent persons are granted on the basis of a quota. For a year the government of the country allocates only 450 quotas for investors. In order to have time to get it, you need to prepare the documents in advance. Therefore, now they are already preparing to apply in January 2022.

A residence permit in the European Union allows one to move to the country of residence, do business and study there. As long as the residence permit or permanent residence card is valid, the investor can travel freely in the Schengen area.

Immigrant Invest is a licensed agent of European residence permit and permanent residency programs. If you want to become a resident of a European Union member country, seek advice from experts in investment programs.

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