Company: BBVXF
Filing Date: 2025-09-05
Form Type: F-4/A
Source: 0001193125-25-196513
Chunk: 287

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-09-05
Form: F-4/A
Chunk 287
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 reversed. The United States is negatively affected by the impact of the tariff policy on companies and consumers. However, in the Eurozone, part of the negative impact stemming from tariffs is counterbalanced by a more active tax policy. Spain continues to stand out in a positive light in the Eurozone. Inflation is temporarily pushed up by the effects of the tariff policy, especially in the United States. In general, inflation becomes more volatile and erratic, given the backdrop of less stable supply conditions. Central banks adopt a more cautious stance and only cut interest rates when there is a window of opportunity to do so. Both the ECB and the Fed introduce further cuts until interest rates are close to monetary neutrality. The climate of increased uncertainty regarding the economic and foreign policy of the United States could continue to trigger episodes of volatility in the markets. Long-term government bond yields remain stable, while the risk premiums of the European periphery countries remain contained and in line with their respective ratings. Alternative scenario 1 is more optimistic than the baseline scenario and is based on improved global supply -side conditions (geopolitics, energy, etc.) and productivity improvements, further driven by a swift and far -reaching deployment of artificial intelligence applications. In this scenario, economic growth is robust. Inflation remains at levels close to the monetary policy targets, with no upward pressure. Central banks place their interest rates at levels in keeping with monetary neutrality. Global financing conditions remain lax, with no episodes of risk aversion. The economic and financial environment allows risk premiums to remain contained. Alternative scenario 2 is more pessimistic than the baseline scenario and mainly considers the possible materialisation of risks to financial stability, with repercussions for the real economy. Inflation falls due to the damage to the lending channel, financial market dislocation, and the economic recession. Central banks take action to safeguard financial stability through their balance sheet policies and resume their liquidity programmes. The authorities also rapidly cut official interest rates to expansionary levels. Global financing conditions tighten, in terms of both capital markets and credit. Government bond yields in the main developed countries slide, while risk premiums in the European periphery rebound. As at 30 June 2025 and 31 December 2024, the main forecast variables considered for Spain and the United Kingdom are those shown below:

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