Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 504

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 504
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 but not too far from the target, which would lead the Fed to pause interest rate cuts earlier and at a higher level than previously expected. Mexico We expect the economy to slow down, reflecting the effects of fiscal consolidation and reduced investment in infrastructure. The central bank is expected to continue its cycle of cutting official rates, with gradual declines, keeping an eye on the Fed's monetary policy and exchange rate movements. Brazil The economy is expected to slow down, toward more moderate rates compared to the strong dynamism of the last three years. Monetary and fiscal policies will face major challenges. Brazil’s central bank is expected to continue the cycle of interest rate hikes

Annual report 2024 482

| Contents |     | Business model and strategy |     | Sustainability statement |     | Corporate governance |     | Economic and financial review |     | Riskmanagement and compliance |

that restarted in September 2024, which is likely to contribute to the slowdown of the economy, moderate inflation and anchor its medium-term expectations. Fiscal policy is expected to undertake a consolidation process to meet targets and direct the public debt ratio toward a sustainable path. Chile The economy is expected to grow at a similar rate to that of 2024, but with a solid recovery in domestic demand, especially in investment. External demand will likely have a smaller contribution, reflecting increases in imports. Inflation is expected to moderate, but remain above the 3% target, which is expected to be reached in 2026. The central bank has room for additional interest rate cuts depending on inflation and its constraints. Argentina The economy is expected to show a clear recovery, consolidating the improvement in the second half of 2024, with the fiscal balance remaining close to equilibrium, and inflation is expected to continue the moderation observed in the final months of 2024. Expectations of a new agreement with the IMF that would eventually involve additional funding for Argentina and a more stable exchange rate are expected to lead to a replenishment of international reserves. à Financial markets

Our outlook for 2025 points to cautious optimism: a macroeconomic environment characterized by lower interest rates and positive economic growth should support risk appetite. Tax cuts and deregulation efforts from the new US government are likely to support profit growth in the US, although the high valuations of the technology sector could bring some bouts of volatility. Other opportunities are also expected to arise in other regions. While the US and the eurozone are expected to move forward in the monetary easing cycle, we believe that long-term yields on sovereign bonds have little room to fall