Banco Bilbao Viscaya Argentaria Maps Growth Risks as Spain, Mexico and Turkey Diverge

Key Points BBVA sees divergent growth across its key markets : Spain remains resilient, Mexico is struggling with weak investment, and Turkey is continuing a gradual disinflation path.

The bank also said geopolitics and AI are two major forces shaping the global outlook.

Spain’s economy is still expanding solidly , with BBVA forecasting GDP growth of 2.4% in 2026 and 2.1% in 2027. Services, tourism, immigration and household income are supporting growth, though housing shortages and weaker Eurozone demand remain key risks.

Mexico’s low growth is being offset by strong exports , especially to the U.S. under USMCA tariff advantages. BBVA said investment has weakened due to uncertainty and fiscal consolidation, but AI-related computer equipment exports and clean-energy contracts are bright spots.

Banco Bilbao Viscaya Argentaria NYSE: BBVA economists said the bank’s core markets are navigating a global backdrop shaped by geopolitical uncertainty, artificial intelligence investment and shifting trade patterns, with Spain showing resilient growth, Mexico facing weak investment but strong exports, and Turkey continuing a gradual disinflation program.

Speaking during a BBVA Strategic Talks event, Jorge Sicilia, BBVA’s chief economist, said the global outlook is being influenced by “two tectonic forces”: geopolitical concerns and the transformation being driven by AI.

He cited conflicts, strategic rivalry, tariffs, protectionism, defense spending and strategic autonomy as increasingly important factors in economic analysis.

Sicilia said recent attacks involving Iran, the U.S. and Israel were changing geopolitical dynamics and affecting oil and other prices, although BBVA still views current geopolitical risk as lower than levels seen in previous months.

He said BBVA’s baseline assumes oil prices decline going forward, while noting that the path could change quickly if conditions deteriorate.

BBVA expects the U.S. economy to grow by more than 2% over the next two years, while the Eurozone is expected to face more pressure.

Sicilia said BBVA recently revised down its Eurozone outlook due to a larger expected impact from developments around the Strait of Hormuz and volatility in Irish growth data.

He added that AI-related investment is supporting U.S. growth and creating spillovers through import demand.

Spain Outlook Remains Supported by Services and Domestic Demand Miguel Cardoso, chief economist for Spain and Portugal at BBVA Research, said Spain’s current expansion is expected to continue, with GDP forecast to grow 2.4% in 2026 and 2.1% in 2027.

He said BBVA estimates current quarter-on-quarter growth at 0.7%, keeping annualized growth between 2.5% and 3%.

Cardoso said Spain has not seen the slowdown BBVA previously expected from foreign uncertainty and higher oil prices.

However, a weaker Eurozone outlook is weighing on Spanish goods exports, which BBVA expects to fall 1.2% this year before recovering in 2027.

Services remain a key offset.

Cardoso said tourism-related spending by nonresidents is growing at around 10% year over year, supported in part by geopolitical risks redirecting travelers to Spain.

He also pointed to strong growth in non-tourism services, including information and communication technologies, transport, business services, engineering, financial services and trade-related services.

Immigration is another important driver, according to Cardoso.

BBVA expects Spain to create between 450,000 and 550,000 jobs annually in 2026 and 2027.

He also said household consumption should remain supported by real disposable income growth of roughly 2% to 2.5%, rising housing wealth and relatively low intere...