Company: BBVXF
Filing Date: 2025-02-21
Form Type: 20-F
Source: 0000842180-25-000010
Chunk: 135

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-02-21
Form: 20-F
Item: Item 5
Chunk 135
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mainly in the United States). Inflation, however, remains above target in many regions, such as the United States and the Eurozone, driven by service prices. The main exception is China, where the structural slowdown in growth, and particularly in domestic demand, has resulted in very low, although positive, inflation.
In 2025, the policies adopted by the new U.S. administration, marked by significant uncertainty, will be critical. Additional protectionist measures and high fiscal deficits could push inflation higher and dampen growth, according to BBVA Research. Thus, despite recent resilience, BBVA Research expects U.S. growth to slow from 2.7% in 2024 to 2.0% in 2025. The likely inflation uptick, which ended 2024 at 2.9%, is expected to limit the Federal Reserve’s ability to ease monetary conditions further. Interest rates, which fell from 5.5% to 4.5% during 2024, are expected to stabilize around 4.0% by mid-2025 and remain at those relatively high levels for the rest of the year, supporting the strength of the U.S. dollar.
The potential increase in U.S. tariffs would pose a negative shock to the global economy, whose GDP growth is expected to moderate to around 3.1% in 2025, and would exacerbate structural challenges faced by China and the Eurozone. BBVA Research expects Eurozone GDP to grow by 1.0% in 2025, after expanding 0.8% in 2024. Meanwhile, China’s growth is expected to slow to 4.1% in 2025 from 4.8% in 2024. Although the direct impact of U.S. protectionist measures may be more significant for China than the Eurozone, China has greater room for adopting countercyclical policies. Stimulus measures announced recently by Chinese authorities may be supplemented by additional actions in 2025. Additionally, weaker economic activity is expected to keep inflation controlled, at around 2% in the Eurozone and low in China. In this environment, BBVA Research expects further interest rate cuts in both regions. Specifically, the ECB, which reduced its deposit facility rate from 4.0% to 3.0% during 2024, is expected to lower it further to around 2.0% by mid-2025.
Geopolitical factors, including further escalation of conflicts in Ukraine or the Middle