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Economy

Economy

BBVA Research lowered growth expectations for Spain’s GDP to 2.6 percent in 2018 and 2.4 percent in 2019 (representing a drop of 0.3 and  0.1 percentage points, respectively, from the forecast of three months ago). The downward revision is primarily due to a more modest performance in the first half of the year. Lower growth of both exports and private consumption are two important factors contributing to the revised projections. This was the view detailed in the most recent report on the Spanish Economic Outlook, presented today by Jorge Sicilia, chief economist at BBVA Group and director of BBVA Research; Rafael Doménech, head of Macroeconomic analysis at BBVA Research; and Miguel Cardoso, BBVA Research's chief economist for Spain and Portugal.

Francisco González, presidente de BBVA, en la asamblea anual del FMI y el Banco Mundial celebrada en Bali

BBVA executive chairman Francisco González attended this year’s meeting of the International Monetary Fund (IMF) and World Bank in Bali (Indonesia). He commented that resulting from today’s digital revolution, “ultimately there will be more wealth and prosperity for the whole world, and I hope less inequality; less difference between the have and have-nots." Francisco González’s remarks come from what will be one of his last international meetings ahead of handing over the baton to Carlos Torres Vila, after December 31.

The Royal Swedish Academy of Science has awarded the Nobel Prize in Economic Sciences 2018 to U.S. Scientists William D. Nordhaus and Paul M. Romer in Economic Sciences. Nordhaus, who earlier this year won the BBVA Foundation Frontiers of Knowledge Award in Climate Change, has developed the first model capable of integrating economic and environmental data to identify the most efficient policies against global warming. Romer has pioneered the use of technology in macroeconomic research.

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Labour’s share of national income has dropped in most of the developed countries and emerging economies in the past few decades. This trend is not common across industries: the share of income accounted for by wages has seen an increase in the service industry, while it has recorded a fall in the other industries.

In recent months, concerns surrounding the financial health of the business sector have been on the rise. In particular, market participants are worried that higher price pressures, faster monetary policy normalization, and a trade war, amid stretched valuations, could trigger a significant decline in risk appetite. This would lead to higher borrowing costs and tighter financial conditions.

2. Street BBVA City

A traditional debate that ensues when banks are expanding internationally revolves around whether it is preferable to run branch offices or set up subsidiaries. Subsidiaries are associated with decentralized models where banks adapt to the local environment, both from a business and regulatory point of view. The model that uses branches characterizes banks with a more centralized structure, where decisions are made by the parent company.