Mounting trade tensions and the fear of a potential global slowdown have recently caused central banks to rethink their strategies. Some have even kicked-off a new round of interest rate cuts. What’s the goal?

Cost and revenue factors impacting economic activities are often too complex to be properly modelled, in which case optimization through Artificial Intelligence (AI) can lead to academically correct solutions that fall far from being economically optimal solutions.

According to the latest Economic Outlook published this week by BBVA Research, GDP growth has decelerated in 2Q2019, but a rebound in consumption should support moderate growth rates in 2H2019. Survey-based investment indicators are also declining amidst deteriorating business expectations. In addition, countervailing trade dynamics — weaker global growth versus reduced trade tensions — imply there will be no material change in the net export balance.

We live in times of rapid change. And in this age of change, we refuse to just sit with the audience as mere spectators; we want to be in the spotlight, we want to play a leading role in this digital revolution, in this reality that demands us to be able to quickly adapt. It is in this context of relentless transformation that has prompted BBVA Research to launch new website: more user-friendly, with expanded features and a responsive design that adapts to any browsing device.

The Eurozone finance ministers recently approved the appointment of Ireland’s Central Bank Governor,  Philip Lane, as the next chief economist at the European Central Bank (ECB). Alongside the central bank’s president and the members of the Executive Board, which will also see new appointments this year, the chief economist plays a key role on the institution’s Governing Council. According to BBVA Research, this year’s scheduled turnover at the bank, may result in changes to the ECB’s current stance on monetary policy.

According to the latest Economic Outlook published this week by BBVA Research, GDP growth is expected to slow to 2.5 percent in 2019 and 2.0 percent in 2020, while the risk of recession remains elevated over the next 24 months.

According to the Economic Outlook published this week by BBVA Research, GDP growth is expected to moderate in 2019, while the risk of recession remains elevated over the next 24 months.

The Global Economic Forum, which starts January 22nd in Davos, Switzerland, will unite the world’s political and economic elite. Yet the U.S. President, French President and British Prime Minister will not be in attendance. The organizers say this event is taking place at a crucial moment of transformative change.

The slowdown taking place in some economies, protectionism, uncertainty over economic policy, an abrupt adjustment in China and rising debt are some of the issues that threaten to provoke another global economic crisis, one that would impact some regions more than others. “The general perception is that we are now past the peak in the cycle of growth of recent years,” says Rafael Doménech, the Head of Economic Analysis at BBVA Research.

Speaking at the Rome Investment Forum, José Manuel González-Páramo weighted on the future of three key projects for the European Union: the banking union, the capital markets union and the fiscal union. This discussion took place at a key moment for the European bloc, after the meetings held in the last Eurogroup, in the Ecofin and the European Council.  “During this year 2018 there has been a window of opportunity, which has clearly been missed by Europe to implement the necessary reforms,” he noted.

A bill recently presented by Mexican Senator Ricardo Monreal banning some bank fees has been the topic of debate, creating a space for bankers and the government to discuss the topic. In the article “Are bank fees high in Mexico?” published in the newspaper El Financiero, BBVA Bancomer Chief Economist Carlos Serrano Herrera presents information to keep in mind in order to reach some common ground on the issue.

The BBVA Research team has published its Economic Outlook for fourth quarter 2018, a timely look at the anticipated economic impact of midterm elections.

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.

José Manuel González-Páramo called for Europe to move forward now, not “just when there’s a crisis”, and to conclude the banking union, the capital markets union and the fiscal union to have a “much more robust and genuine euro.” Speaking at the Círculo de Economía in Barcelona, he stressed the role that the ECB played in Europe’s recovery. However, the bank must now go back to its original purpose of “contributing to financial stability and separating supervision from monetary policy.”

After the hike in interest rates by the Central Bank of Turkey on September 13 (625 basis points from 17.75 percent to 24 percent), the Turkish government today (Thursday) unveiled a new economic program for the next three years (2019-2021). BBVA Research in a report released Thursday believes that both monetary policy and fiscal policy are now better geared toward correcting inflation and the imbalances of the Turkish economy.

The Central Bank of the Republic of Turkey (CRBT) decided today to raise the official interest rate by 625 basis points from 17.75 percent to 24 percent. As a BBVA Research report points out, the hike came in above market expectations (21 percent according to Bloomberg consensus estimates), and BBVA Research’s own forecast (22.75 percent). BBVA Research welcomes the move and believes it should be backed up by a medium-term coherent and detailed fiscal plan.

The negotiations between Mexico, the U.S., and Canada have been a recurring topic in the news recently. BBVA Research has used big data techniques to monitor the media coverage and tone used by the national media outlets in each North American country as the slow-going renegotiation of this agreement has been reported.

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.

Political concerns in Italy and the intensification of geopolitical tensions between the U.S. and Turkey set a cautious tone in financial markets last week. The tone was not alleviated by the possibility of an easing in trade disputes between China and U.S.

BBVA Research maintains its GDP growth forecasts for Spain at 2.9 percent for 2018 and 2.5 percent for 2019. The increasing likelihood that some risks might finally materialize could drive the Spanish economy to slower growth scenarios, according to the latest Spain Economic Outlook report published by BBVA’s studies unit. The report was presented today by Jorge Sicilia, Chief Economist of BBVA Group and Head of BBVA Research, Rafael Doménech, Head of Macroeconomic Analysis of BBVA Research and Miguel Cardoso, Chief Economist Spain and Portugal. Under this scenario, the country is expected to generate about 880,000 jobs over the two-year period, causing the country’s unemployment rate to drop below 14%.

“I love food and I am mad about sports.” Hearing him talk about his hobbies, Jaime Sáenz de Tejada (Madrid, 1968) comes across as someone who enjoys life. As a kid he was into basketball and track and field. Later, he got interested in paddle tennis and golf. About a year and a half ago he fractured his thigh bone forcing him to focus a bit more on swimming and cycling. He defines himself as a lover of Peruvian cuisine, because it offers “the best fusion of sensitivities from many places, with ingredients of unparalleled quality.” He’s even given cooking chifa (a fusion of Peruvian ingredients and traditions with Cantonese elements) a go, but “being surrounded by so much talent, I would never dare to compete in culinary skills.” Married and with five children – “one of them is on his way to becoming a chef, just like his mom,”- he’s been a part of BBVA for more than 25 years. In 2014 he became the Group’s Chief Financial Officer. He devotes most of his scant free time to “living his children’s education intensely and sharing activities with them.” He’s been lucky to live in New York – at two different periods – , London, Uruguay and Peru.

The new accounting regulation IFRS 9 aims to buttress financial stability against future crises.  It obliges financial institutions to more faithfully reflect credit risk and calculate provisions for insolvencies following an expected loss model (versus the previous “incurred loss” model). For a majority of financial institutions, this has resulted in an increase in provisions and the subsequent impact on capital.

Emerging economies were amongst the topics addressed at the Institute of International Finance’s (IIF) spring meeting, held in Brussels last week. This BBVA-sponsored event convened financial institutions, regulators and public bodies to debate some of the industry’s most pressing issues, including the economic and political outlook, regulation and fintech.

BBVA Research has raised its growth forecasts for US growth and now sees GDP at 2.8% this year and the next due to the strength of the global economy and the Trump administration’s fiscal stimulus.

“Our way is to help our customers take the best decisions.” In an in-depth interview with Actualidad Económica magazine,  BBVA CEO Carlos Torres Vila explained the profound transformation that BBVA is undergoing. This is a process that is materializing in customized solutions to help the bank’s customers and clients achieve their vital goals, he added.

As we expected, the FOMC increased the Fed funds rate to 1.5%-1.75%, confirming that newly appointed Chairman is committed to maintaining continuity with his predecessor. The language in the statement underpinned the committee’s shift from a defensive to potentially offensive mindset, with strong labor market signals, increased business investment and firmer actual inflation readings.

Timothy Bresnahan, Ariel Pakes and Robert Porter study the impact of businesses in the market. To measure this ability that firms have to control prices in a given industry, the three Frontiers of Knowledge laureates in Economics have developed methods that have had a significant and lasting impact on empirical research in the industrial organization field, as well as in other applied fields like health or environmental economics.

Market analysts reported positively on BBVA’s 2017 results. The majority pointed to the solid underlying trends, the strength of recurring revenues and cost containment as the key drivers of the bank’s solid performance.

Over the past three years, the asset allocation team of BBVA Asset Management has overhauled its investment process to bring as much objectivity as possible to decision-making when building a portfolio. Based on the principles of behavioral economics, the new process aims to determine how the power of the mind affects financial decisions.

BBVA Compass assembled a worldly-wise panel in Houston last week to help its Global Markets clients, all of whom maintain assets outside the U.S., sort through the barrage of global economic news to better understand the risks.

As had been expected, following its monthly meeting the European Central Bank left interest rates unchanged. At the same time, ECB President Mario Draghi introduced the exchange rate as an element of uncertainty, stressing that he will monitor the fluctuations in the euro and their possible consequences. Likewise, he reiterated the possibility of broadening the bond purchase program, continuing his accommodative policy, which will be accompanied by interest rates at minimum levels for a long period of time.

Economic activity in Latin America has been invigorated in recent months, in line with the recovery of confidence among families and businesses and a more favorable external context. In its Latin America Economic Outlook for first quarter 2018, BBVA Research forecasts that the region’s growth will increase from 1.1% in 2017 to 1.7% in 2018 and 2.5% in 2019.

BBVA Research maintains its forecasts for Spain’s GDP growth in 2017 and 2018 at 3.1% and 2.5%, respectively. In addition, it expects that the economic recovery will continue in 2019  (with a 2.3% increase in GDP) and that the improvement in the economy will translate into wage growth. BBVA Research’s latest Spain Economic Outlook was presented today by Jorge Sicilia, Chief Economist of the BBVA Group and Director of BBVA Research; Rafael Doménech, Head of Macroeconomic Analysis at BBVA Research; and Miguel Cardoso, Chief Economist for Spain and Portugal.  If these forecasts prove to be correct, Spain´s unemployment rate could drop to 13.4% by end of 2019, which would imply the creation of 860,000 jobs over the next two years.

In late 2017, the European Commission established a roadmap for deepening the European Economic and Monetary Union (EMU). The plan represented yet another step towards the economic integration of the EU, during a political year marked by the elections in the Netherlands, France and Germany and the Brexit negotiations with the United Kingdom. One of the most far-reaching proposals is transformation of the current European Stability Mechanism (ESM) into a European Monetary Fund (EMF). The year 2018 opens with the challenge of implementing this proposal.

During 2017, the European Union managed to weather populist electoral bids in its member countries, and to keep the Brexit talks on track. But the year to come presents even larger challenges that will require a sustained, collective effort by EU leaders, says BBVA Executive Director José Manuel González-Páramo.

Agriculture has become the driver of the Argentine economy. Heavy investment in infrastructure (roads, trains, hydraulic construction) will help to improve costs, opening the road to a growth which seems infinite, thanks to a persistent and solid demand.

Once again, the Argentine economy faces critical decisions to avoid a new downturn and take the path to more sustainable growth. Markets are keeping a close eye on the post-electoral roadmap outlined by the administration of President Mauricio Macri.

The outlook for Argentina’s economy in 2018 remains optimistic, with GDP expected to expand by nearly 3% for the second consecutive year. However, achieving sustained growth and attracting international investment will depend, not just on stable macro indicators, but on long-lasting structural reforms. While the initial signs of economic recovery became apparent in the second half of 2016, it wasn’t until mid-2017 that growth rates began to pick up across most industries.

The oldest private domestic bank in Argentina and one of the leaders in Latin America, BBVA Francés on October 14 marked its 130th year in operation and its 21st year as part of the BBVA Group. In the course of its history, BBVA Francés has gone from being a 20th century “temple of money,” to a powerhouse of digital banking in the Argentina of the 21st century.

Car sharing and driverless cars are shaking the very foundations of the automobile industry. Will technology make car ownership obsolete?

Big Data Spain brought together more than 1,200 specialists in data analysis and science in Madrid for two days, during which it was made clear how this technology can bring a new dimension to any area: from marketing to user experience to economic and geopolitical analysis.

The refugee crisis, political events and the social reaction to them, natural disasters such as Hurricane Harvey or Hurricane Irma, the sentiments of people or central banks… there is an ever-increasing number of events whose economic impact, in a world of growing risk and uncertainty, is hard to gauge using traditional methods. That’s where ‘Big Data’ and ‘Data Science’ techniques come in, helping to quantify these trends from micro to macro level.

The Bilbao headquarters of BBVA was one of the stops on a tour of Spain by future U.S. leaders. BBVA is the only Spanish financial institution involved in the “U.S. Young Leaders” program, which was launched in 2000 by Fundación Consejo España-Estados Unidos and the US-Spain Council.

Latin America will be one of the leaders of the global economy. The digital transformation has been one of the keys to this reduction in poverty and improvement in social indicators. But how has it helped? One example is digital financial inclusion.

The European Commission (EC) and the European Banking Authority (EBA) have published their work plans for 2018. The documents describe the specific activities and tasks the organizations plan to carry out next year. Both proposals place increasing importance on the fintech sector, since it could bring about a radical change the financial industry.