Company: BBVXF
Filing Date: 2025-02-21
Form Type: 20-F
Source: 0000842180-25-000010
Chunk: 137

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-02-21
Form: 20-F
Item: Item 5
Chunk 137
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 in domestic demand, relative exchange rate stability, and a moderation in annual inflation, which stood at 44.4% in December 2024. Following these improvements, the CBRT cut interest rates by 250 basis points in December 2024, to 47.5%. If inflation continues to moderate, as expected by BBVA Research—which forecasts a further deceleration to around 26% by the end of 2025—, interest rates could be reduced further. This reduction in inflation and interest rates may be supported by relatively limited economic growth, estimated at around 3.2% in 2024 and 2.5% in 2025. A less favorable global environment and some fiscal consolidation are expected to exert downward pressure on growth this year. 
In Argentina, significant fiscal consolidation and relative exchange rate stability have contributed to a moderation in inflation throughout 2024. Additionally, after a sharp contraction in the first half of 2024, there are early signs of an economic recovery. Following a decline of approximately 3.8% in 2024, GDP is expected to grow by around 5.5% in 2025, according to BBVA Research. Inflation reduction prospects have improved, with expectations for it to converge to around 30% by the end of 2025. However, there is significant uncertainty regarding the future evolution of the exchange rate, which has recently remained stronger than anticipated.
In Colombia, economic growth gradually recovered throughout 2024 as inflation and interest rates declined. BBVA Research estimates that GDP grew by 2.0% in 2024 and expects an increase of 2.5% in 2025. There has been a slight downward revision for the expected 2025 growth that is largely attributed to a less favorable external environment than anticipated and the expectation of a slower pace of monetary easing. Specifically, interest rates, which fell by 350 basis points to 9.50% during 2024, are expected to decline more gradually ahead and are expected to be around 7.0% by the end of 2025. Annual inflation, which closed 2024 at 5.2%, is expected to ease further in the coming months but remain above the 3% target, likely around 3.9% in December 2025.
In Peru, BBVA Research estimates that GDP grew by 3.1% in 2024 driven by more favorable weather conditions and the boost to consumption from the latest extraordinary withdrawals from pension funds.