Market Outlook

IMPORTANT UPDATE: It’s official, Cyprus closed its popular citizenship by investment program on 1 November 2020. What this means is investors will no longer be able to directly acquire a Cypriot passport by investment.

A new program has taken place, however. The Cyprus Golden Visa provides individuals with an alternative route to permanent residency in Cyprus. Those looking for European citizenship can also apply to the Malta citizenship program, which offers a direct investment route to a Maltese passport.


We take a look at the market outlook for Portugal, the UK, Spain, Cyprus and Malta with details on interest rates, unemployment, and GDP.

Portuguese Economy

The World Bank classes Portugal as a high-income country. Main components of Portugal’s economy are construction, electronics and textile manufacturing, metals and metalworking, aerospace and automotive, fish canning, wine, and tourism.

GDP has experienced growth and contraction since 2008 and needed an $83 billion bailout in 2011. Its year on year growth in Q1 of 2017 was 2.8%. The Bank of Portugal expects an export-driven recovery to produce 1.8% growth in 2017, 1.7% in 2018 and 1.6% in 2019, bringing the GDP close to pre-2008 levels.

Inflation increased 2.0% year on year to April 2017, the highest rate since October 2012. This is partly due to transport and hotel stays and the effect of Easter falling in April in 2017. The interest rate is 0%.

Unemployment in Q1 2017 was at 10.1%, its lowest rate since Q4 2009 after reaching nearly 18% in 2013, and fell below 10% for the first time in eight years in February 2017. The youth unemployment rate also fell to 23.3% in March 2017 from 31.1% a year ago.  

S&P’s credit rating for Portugal is BB+ with a stable outlook. The debt to GDP ratio was 130.4% in 2016, the third highest in the EU and is near its all-time high of 130.6% in 2014. The country has a 2.1% budget deficit, a 40-year low.

Indicators as of May 2017:

GDP: US$ 199 billion (2015)

GDP YoY growth: 2.8%

GDP QoQ growth: 1.0%

Interest rate: 0%

Inflation: 2.0%

Unemployment rate: 10.1%

Government budget: -2.1%

Debt/GDP: 130.4%

Current account 0.7%

Currency: Euro

Population: 10.34 million (2017 estimate)

Sources: Trading Economics, US News, Reuters

Spanish Economy

The World Bank classes Portugal as a high-income country. Services made up 75% of Spain’s economy in 2016, while industry accounted for 22.4%.

Spain experienced a five-year crisis, which ended in 2013; it has had 14 consecutive quarters of growth since. Overall Spain’s economy grew by 3.2% in 2016. The European Commission forecasts GDP growth of 2.8% in 2017 and 2.4% in 2018.

Prices increased 2.6% year on year to April 2017, mainly due to rises in the cost of houses and utilities and cafes, hotels and restaurants. Year on year inflation in 2017 is expected to be 2% and 1.4% in 2018. The interest rate is 0%.

Unemployment rose from 18.63% in Q4 2016 to 18.75% in Q1 2017, the first rise in a year. The unemployment rate had reached a high of 26.94% in Q1 2013. Unemployment is expected to average 17.6% in 2017 and 15.9% in 2018.

S&P’s credit rating for Spain is BBB+ with a positive outlook. The debt to GDP ratio was 99.4% in 2016, near its high of 100.4% in 2014. Debt to GDP is forecast to decline to 98.5% in 2018. The country has a 2.1% budget deficit, a 40-year low.

Indicators as of May 2017:

GDP: US$ 1193 billion (2015)

GDP YoY growth: 3.0%

GDP QoQ growth: 0.8%

Interest rate: 0%

Inflation: 2.6%

Unemployment rate: 18.75%

Government budget: -4.5%

Debt/GDP: 99.4%

Current account 1.5%

Currency: Euro

Population: 46.07 million (2017 estimate)

Sources: Trading Economics, European Commission

UK Economy

The World Bank classes the United Kingdom as a high-income country. The UK economy is mainly driven by the financial services sector, with industry in aerospace and automotive and oil and gas also significant sectors.

The UK economy grew 0.3% quarter on quarter in Q1, below expectations of 0.4%, falling from 0.7% growth in the previous quarter, and the slowest growth rate since Q1 2016. Distribution, hotels and restaurants, retail trade, accommodation services, transport, and storage and communication all decreased. The economy grew 2.1% year on year to Q1 2017, missing expectations of 2.2%. Annual growth was 1.8% in 2016 and expected to be the same in 2017, and to fall to 1.3% in 2018.

Consumer prices increased 2.7% year on year to April 2017. Inflation is expected to be 2.6% in both 2017 and 2018, above the target of 2% and partly due to the depreciation of sterling. Wage growth is forecast to be ~2% for 2017 and 2018. The interest rate is 0.25%.

Unemployment is at 4.6% in March 2017, the lowest rate since July 1975, while the employment rate is at an all-time high of 74.8%. Unemployment is projected to rise from 4.8% in 2016 to 5% in 2017 and 5.4% in 2018.

S&P and Fitch both give the UK a credit rating of AA with a negative outlook. The debt to GDP ratio was 89.3% in 2016, an all-time high; this is forecast decrease to 87.9% in 2018. The country has a 3.0% budget deficit, also forecast to decrease, to 2.3% in 2018.

Indicators as of May 2017:

GDP: US$ 2.861 billion (2015)

GDP YoY growth: 2.1%

GDP QoQ growth: 0.3%

Interest rate: 0.25%

Inflation: 2.7%

Unemployment rate: 4.6%

Government budget: -3.0%

Debt/GDP: 89.3%

Current account -4.4%

Currency: Pound Sterling

Population: 65.47 million (2017 estimate)

Sources: Trading Economics, European Commission

Cyprus Economy

The World Bank classes Cyprus as a high-income country. 80% of the GDP and 75% of employment are achieved through tourism, financial services, and real estate.

In 2013 during the Eurozone debt crisis, Cyprus received €10billion from the Troika of the EC, ECB and IMF; however through restructuring, diversification and austerity measures, Cyprus exited recession a year earlier than expected in 2015, and growth has continued since, with the most recent year on year growth to Q4 of 2016 at 2.9%, and a growth rate of 2.5% to 3% is predicted by the Cypriot Ministry of Finance for 2017.

Inflation is at its highest since September 2012 at 2.0% year on year to April 2017, mainly due to increasing housing and utility prices. Wages were up 0.4% in Q4 2016 compared with Q4 2015, the first yearly increase since 2012. The interest rate is 0%.

Unemployment was at a record high in January 2015 of 16.8% and has been decreasing overall; in March 2017 unemployment was at 12.5%, a decrease on February’s 12.8%. The trend is forecast to continue, decreasing to 10.7% in Q1 2018 and to continue to decrease through 2020.

S&P set Cyprus’s credit rating at BB+ with a stable outlook in March 2017. The debt to GDP ratio rose steadily from 44.7% in 2008 to 107.1% in 2014 but has remained relatively stable since and is now at 107.8%. The country has a 0.4% budget surplus.

Indicators as of May 2017:

GDP: US$ 19.6billion (2015)

GDP YoY growth: 2.9%

GDP QoQ growth: 0.7%

Interest rate: 0%

Inflation: 2.0%

Unemployment rate: 12.5%

Gov budget: 0.4% surplus

Debt/GDP: 107.8%

Current account -4.8%

Currency: 1.09, Euro

Population: 1.186 million (2017 estimate)

Sources: Trading Economics, Cyprus Profile, The Commonwealth, Worldometers

Maltese Economy

The World Bank classes Malta as a high-income country. Main components of Malta’s economy are foreign trade as it is a freight trans-shipment point, electronics and textile manufacturing, tourism and financial services. 

GDP experienced very high growth through 2014 and 2015, and its year on year growth to Q4 of 2016 was 5.1%.  Industrial production and tourism experienced strong growth at the start of 2017, while consumer confidence and producer sentiment are positive. The European Commission Directorate-General for Economic and Financial Affairs predicts 4.6% growth in 2017 and growth of 4.4% in 2018.

Inflation has increased 1.2% year on year to March 2017. Furniture and household equipment experienced the largest increases, while transport, housing, utilities and transport were steady. Wages reached an all-time high in Q4 2016, an increase of 4.6% over Q4 2015, and in April 2017 the government took steps to increase the minimum wage. The interest rate is 0%.

Unemployment is at record lows, at 4.2% in Q4 2016. Unemployment has decreased in every quarter since Q2 2013, barring a very slight increase in Q3 2014. Unemployment is expected to remain near record lows and to be at  ~4.5% in 2020.

S&P set Cyprus’s credit rating at A- with a stable outlook in October 2016. The debt to GDP ratio was 58.3% in 2016, down from 70% in 2013. Debt to GDP is forecast to decline to 53.5% in 2018. The country had a 1.0% budget surplus, in 2016 expected to be 0.5% in 2017, and back up to 0.8% in 2018.

Indicators as of May 2017:

GDP: US$ 10 billion (2017 estimate)

GDP YoY growth: 5.1%

GDP QoQ growth: 1.7%

Interest rate: 0%

Inflation: 1.2%

Unemployment rate: 4.2%

Government budget: 1.0% surplus

Debt/GDP: 58.3%

Current account 4.3%

Currency: Euro

Population: 0.43 million (2017 estimate)

Sources: Trading Economics, European Commission, World Bank, Focus Economics