Publications

In recent months, the main feature of the global economic outlook has been the increase in uncertainty. The erratic tariff policy of the American administration and the lack of precedent for recent protectionist shocks have made reading the economic outlook complicated.

BBVA Research’s forecasts released this past week point to slight changes in GDP growth expectations, despite the fact that the economy has been exposed to significant shocks.

The impact of tariffs is computed through the calculation of effective tariffs under different scenarios and simulations based on distinct methodologies. If the current tariffs remain broadly unchanged, global growth could initially fall between 0.2pp and 0.5pp, and potentially more over the medium term.

The tariff hikes being pushed through by the United States since the start of Donald Trump's second term are genuinely unprecedented. Not in the last century have we witnessed such a sudden and erratic shift in trade policiy implemented within such a short space of time.

The report analyzes U.S. reciprocal tariffs on Asian countries, with Cambodia and Vietnam hit hardest. Dual dependency puts many Asian economies in a strategic dilemma between the US and China. Using input-output models, it presents three scenarios (risk, pragmatic, optimistic) showing varying GDP impacts.

This year, the spring meetings of the International Monetary Fund (IMF) and the World Bank (WB) in Washington were characterized by noise. The biggest concerns remain the impact of tariffs on the economy and on financial assets, especially the dollar.

The United States' trade strategy aims to reduce the nation’s bilateral trade deficits to zero. This target is difficult to achieve and the product of a misdiagnosis, which is currently eroding global growth and undermining stability.

The temporary suspension of some of the measures has brought relief, but Europe and Spain have taken the opportunity to outline their strategy for addressing the increase in trade barriers and potentially more-negative scenarios.