Company: BBVXF
Filing Date: 2025-09-09
Form Type: 424B3
Source: 0001193125-25-198517
Chunk: 279

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-09-09
Form: 424B3
Chunk 279
---
, i.e. the probabilities assigned to the baseline scenario and to the optimistic scenario are 60% and 10%, respectively, assigning a 10% probability to a more adverse scenario characterised by interest rate hikes. A 20% probability is assigned to alternative scenario 2. To carry out the forecasts of these scenarios, five-year time horizons are used. The main variables considered are changes in GDP, the unemployment rate and house prices. The baseline scenario is influenced by the US tariff policy and the impacts of the measures announced thus far. The divergent economic growth between the United States and the Eurozone is partially 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