La Jornada: Artificial intelligence bubble would be a risk for global GDP: BBVA

The global economy still faces different risks and the first is that artificial intelligence will be implemented much faster than expected and will not generate productivity gains at the same pace, warned Carlos Serrano, chief economist at BBVA.

“That can give greater growth to the economy, but there may also be the risk that we are facing a bubble, that the share prices of companies that make artificial intelligence fall and affect the economy,” he commented.

“The United States is growing robustly due to the enormous amounts of investment in artificial intelligence,” said the analyst.

Another risk factor is that the threat continues that that nation will apply more tariffs and the effects of its legislative elections next November: “if the Democrats win both chambers, there may be paralysis and some government decisions.”

Furthermore, among the obstacles to the global gross domestic product (GDP), there are climate events, which always represent risks for economies. Another situation is the oversupply of China’s real estate market.

“This may have a problem that eventually affects the financial system. China may also have a risk of negative inflation, a harmful condition for an economy,” the analyst mentioned.

“The global economy has been affected by the conflict in Iran, with higher inflation rates that have caused the central banks of advanced economies to raise rates or not lower them as anticipated, and this means that growth and the global economy will be lower than anticipated, with the exception of the United States, which had a very powerful advance due to investment in artificial intelligence,” he mentioned.

BBVA expects that in 2026, China’s growth will be 4.5 percent, and 4.2 in 2027. “It wasn’t that long ago that China was growing at double digits, that is already behind us,” said Serrano.

Europe, for its part, will present weaker progress, since it has been affected by the war conflict in the Middle East, which significantly raised natural gas prices. “We are estimating a growth of 0.7 percent for the eurozone this year and 1.2 in 2027,” the specialist projected.

Meanwhile, the United States will grow 2.4 percent this year and 2.2 the next, due to the enormous amounts of investment in artificial intelligence.

Advance of 1.2 percent expected in Mexico

The expansion of Mexico’s GDP will be 1.2 percent this year and 1.8 in 2027, he estimated. Mexico’s growth is based on lower domestic demand and Mexican exports, since the United States buys Mexican manufacturing goods and inputs.

“We think that the World Cup is going to provide a temporary boost during the second quarter of the year, which is going to offer some support to the economy,” said Saidé Salazar, principal economist at BBVA Research.