Company: BBVXF
Filing Date: 2025-02-21
Form Type: 20-F
Source: 0000842180-25-000010
Chunk: 136

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-02-21
Form: 20-F
Item: Item 5
Chunk 136
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 East, and potential U.S. shifts on trade, migration, and fiscal policies, pose risks to the global macroeconomic outlook. These factors heighten the risk of inflation—and, consequently, interest rates—remaining above expectations, while increasing the likelihood of lower-than-forecast GDP growth and heightened macroeconomic and financial volatility.
In Spain, economic activity showed dynamism throughout 2024, largely driven by service exports, fiscal policy measures, private consumption, and an increase in the labor force due to factors such as higher migration flows. In this context, recent data suggest, according to BBVA Research, that GDP growth was around 3.1% in 2024, slightly above the previous forecast of 2.9%. However, a less favorable external environment, gradual fiscal consolidation, a potential slowdown in service exports after strong increases in prior years, and the limited but negative impact of the recent DANA (torrential rains and floods) in the Valencia region are expected to moderate growth to around 2.3% in 2025. Annual inflation, which ended 2024 at approximately 2.8%, is likely to remain slightly below 2% in 2025.
In Mexico, GDP growth slowed in 2024 and is expected to remain relatively limited in 2025, in a context marked by uncertainty over the impact of recently approved constitutional reforms and the policies of the new U.S. administration, as well as an anticipated process of fiscal consolidation following the increase in the public deficit in 2024. Specifically, BBVA Research forecasts GDP growth of 1.2% in 2024 and 1.0% in 2025. Annual inflation reached 4.5% at the end of 2024 and is expected to moderate to between 3.0% and 4.0% in 2025. In this scenario, official interest rates, which were cut to 10.0% in December, are likely to continue decreasing, converging to around 8.0% by the end of 2025.
In Turkey, since the general elections held in May 2023, there have been increasing signs of normalization in economic policy overall, and monetary policy in particular, pointing to a gradual correction of current macroeconomic distortions. In this context, reference interest rates rose from 8.5% at the beginning of 2023 to 50.0% by September 2024, and other countercyclical measures have been announced. These actions have contributed to a slowdown