European Commission forecast: what will happen to the region’s economy in 2022

According to the European Commission’s forecast the average GDP of EU and Eurozone countries will be +4.0% in 2022. This is 1,3% lower than a year earlier. The reasons for the slowdown in economic development are the consequences of the pandemic, high energy prices and problems with supply chains. These factors fuel inflation and delay economic recovery.

The average inflation rate in the European Union is 3,9%, which is almost twice the target of the European Central Bank. According to the forecast of the European Commission, the inflation rate will decrease to 1,7% only by 2023. In Slovakia, Portugal, Spain and Malta, the economy continues to develop: the current level of GDP in these countries is between 5 and 6% and will grow to 2% in 2022.

Malta can show the highest economic growth rates in the European Union — the country’s GDP will reach +6%, which is 2% higher than the average for the region. Inflation in the country will rise to 2,1%, but will remain the lowest in the European Union. Foreigners can obtain a residence permit in Malta by investing in real estate. The official status in the country allows you to open accounts in European banks and do business. With a residence permit in Malta, investors become tax residents of the country and can take advantage of a special tax regime: pay 15% on foreign income transferred to Malta, and 0% if the income is not transferred. The minimum family tax is €15,000.

Portugal ranks third among the eurozone countries in terms of growth in 2022: GDP will reach +5.5%, and inflation will be 2,3%. The forecast of the European Commission is fully consistent with the assessment of the government of Portugal. A residence permit in Portugal is obtained when buying real estate in the amount of €350,000 or when buying shares of investment funds in the amount of €500,000. From 2022, residential real estate in Lisbon and Porto is not eligible for participation in the investment program, investors can only buy commercial properties, for example, a shop space in residential project with a guaranteed return of 4%.

Cyprus. The growth rate of the Cypriot economy will be +4.1%, and the inflation rate will be 2,6%. According to the forecast of the European Commission, inflation will decrease to 1,2% by 2023. Investors invest from €300,000 in real estate or securities in Cyprus to obtain permanent residence status. Together with the permanent residence card, investors get the opportunity to conduct business and optimize taxation: there are no taxes on foreign income and inheritance in the country, low rates of property and income tax. The corporate tax rate in Cyprus is one of the lowest in Europe — 12,5%.