Of the tax revenue paid by Europeans, only one euro per taxpayer is used to finance the EU’s budget. In total, the EU manages a budget of about 1% of the gross national income of its member states. Nonetheless, how this money is invested directly impacts Europeans’ lives; it is therefore of interest to understand the EU budget as of 2021, the first spending plan after the UK’s exit from the EU.
BBVA Research | Geo-World: Conflict & Social Unrest
BBVA Research | Geo-World: Conflict & Social Unrest
As expected, the European Central Bank left interest rates and its asset-purchasing program, or quantitative easing (QE), unchanged. After its policy meeting, Mario Draghi instead stressed concerns about the global risks posed by protectionism as well as the need to focus on inflation.
According to BBVA Research’s Latin America Economic Outlook report for the second quarter of 2018, the region’s positive trends of recent years are set to continue, with GDP growth forecasted at 1.4% for 2018 and 2.5% for 2019. However, BBVA’s study service has downgraded its 2018 growth forecast for the region by three tenths.
The Eurosystem is the monetary authority of the euro area. It comprises the European Central Bank (ECB) and the national central banks of the Member States whose currency is the euro. Its primary objective is the maintenance of price stability, and specifically, keeping inflation in the euro area (calculated based on internal stats of the ECB) “close to but under 2 per cent.”
The creation of a Single European Market without borders or customs duties is considered one of the greatest achievements of the European Union. The common market is now 25 years old and finds itself at a moment of crucial change in which digital disruption requires new products and services to be regulated.
Fears of a trade war between the U.S. and China are escalating by the day. Trump announced extra duties on 10% of Chinese imports and the two world powers have entered into a “tit-for-tat” trade retaliation that has unnerved investors and shaken financial markets. Nevertheless, the likelihood that these skirmishes will turn into a full-blown trade war are still low, as explained in a BBVA Research report.
Although the uncertainty surrounding Catalonia’s economic policy hasn’t had the expected negative impact, the favorable global environment seems to have offset the its negative effect on production and employment. Consequently, BBVA Research has upgraded its 2018 and 2019 GDP growth forecasts for Spain to 2.9% and 2.5% from 2.5% and 2.3% respectively. 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 940,000 jobs over the two year period, causing the country’s unemployment rate to drop below 14%.
Europe and the U.S. need to promote global trade and services standards. And to do this, they must keep relying on multilateral agreements, which set out a strategic position with respect to third parties from a commercial, economic and political point of view. “The United States and Europe, united, are much stronger,” said José Manuel González-Páramo, Executive Member of the Board, Head of Global Economics, Regulation and Public Affairs at BBVA, in Barcelona on Monday.
“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.
Financial education is key to guaranteeing a sustainable and inclusive economy, creating an era of opportunity through digital transformation, asserts BBVA’s Executive Director responsible for Global Economics, Regulation & Public Affairs, José Manuel González-Páramo.
Over 300 businessmen Monday took part in a meeting in Bilbao of the Business 20 (B20) –a corporate forum of the G20. The companies present at the meeting are at the vanguard of digitalization and industry 4.0. At the start of the event, José Manuel González-Páramo, BBVA Executive Board member and vice president of one of the B20 task forces, called for “greater cooperation between the public and private sectors” to meet the challenges posed by the new digital economy.
Eight years have passed since the B20, known as the “Business G20”, met for the first times with the view of providing G20 leaders with proposals for more inclusive development. Since then a number of constructive policies have been put forward, although the main economic and social problems facing the world remain an unresolved challenge. The B20 has not only become a beacon throwing light on how to tackle these challenges, but also plays a crucial role within the G20. It is Argentina’s turn in 2018 to lead this mission.
The headlines about the U.S. dollar this year have underscored how complicated it is to predict the movement of any one currency in a global economy. They’ve gone from grim (“Dollar set for worst January in 30 years”) to triumphant (“Dollar claws back”) to deflated (“Dollar’s rebound fizzles”) in a matter of weeks.
On January 31st, the European Banking Authority (EBA) announced the formal launch of this year’s EU-wide stress test exercise of the euro area. It also unveiled the macroeconomic scenarios under which the exercise will be carried out. The adverse scenario implies a deviation of EU GDP from its baseline level by 8.3% in 2020, resulting in the most severe scenario to date. The EBA expects to publish the results of the exercise by 2 November 2018
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.
José Manuel González-Páramo, BBVA’s Executive Director Responsible for Global Economics, Regulation & Public Affairs, will chair the recently created Spain-Peru Council Foundation, a non-profit body set up with the aim of fostering relations between the two countries.
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.
This year, the World Economic Forum at Davos is attracting plenty of attention. From the long-awaited speech by U.S. President Donald Trump to the criticisms of American protectionism and support for global cooperation expressed by German Chancellor Angela Merkel and French President Emmanuel Macron, no leader misses their moment in the spotlight to send messages to the world community.
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.
U.S. President Donald Trump has confirmed his attendance at this year’s annual World Economic Forum, which will kick off on January 23 at Davos, Switzerland. President Trump will share the spotlight with some 60 heads of state and government, and an ensemble of business leaders, scholars, artists and prominent figures from civil society. Together, they will seek to deliver on the meeting’s theme: “Creating a shared future in a fractured world.’ Indian Prime Minister Narendra Modi and President Trump will deliver the event’s opening and closing speeches, respectively.
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.
Today marks the second anniversary of death of David Bowie, a pop icon who needs no introduction. Hundreds of lines have been written about his life, career and concerts. But what many are not aware of is that Bowie was also a pioneer in the financial world: he was the first artist ever to issue a “celebrity bond.”
In December, the Basel Committee on Banking Supervision (BCBS) announced the finalization of the review process of the Basel III framework, which will allow banks to better withstand financial crises. The new standards, which will enter into force in January 2022, should help clarify and bring more stability to the global regulatory framework.
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.
For Argentina, assuming the presidency of the G20 is a great challenge and commitment, but also a great opportunity. Indeed, after years during which the doors to international finance have remained closed to Argentina, the country is making significant strides to reclaim its spot as Latin America’s third-largest economy.
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.
The Financial Stability Board (FSB) has just published the list of Global Systemically Important Banks (G-SIBs) for 2017. The number of institutions remains the same, but with three significant changes. Systemic banks have a major impact on the economy, but what makes them different from the rest?
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.