As 2024 unfolds, a cascade of elections across key nations is poised to send ripples through global markets. With countries representing over 60% of the world’s economic output heading to the polls, financial landscapes could face a “ballot box bombshell,” warns Morningstar. Here’s a guide to the elections shaping up the year and the potential market risks associated with each.
1. Taiwan (Jan 13): The election in Taiwan holds significance amid U.S.-China tensions. A win for the Democratic Progressive Party (DPP) could escalate geopolitical tensions, impacting global markets.
2. Europe (Various Dates): Elections across Portugal, Belgium, European Parliament, Croatia, and Romania, among others, could influence the direction of the European Union. Gains for Eurosceptic parties may raise concerns about European integration, affecting stocks and bonds.
3. Russia (Mar 17): Vladimir Putin’s expected win in Russia raises questions about the war in Ukraine. Any revelations during the campaign may impact global relations and could lead to Western governments seizing Russian assets.
4. India (Apr-May, TBC): Narendra Modi’s bid for a third term carries implications for India’s economic policies. Persistent inflation and potential shifts in fiscal populism could influence market sentiments.
5. Mexico (Jun 2): The presidential election in Mexico could lead to a Congress reshuffle. Policy changes, especially in spending, might impact the peso and government bonds.
6. South Africa (May-Aug 2024, TBC): Economic challenges and political shifts in South Africa’s elections may affect debt levels and social spending, impacting the currency and public finances.
7. United States (Nov 5): The potential rematch between Donald Trump and Joe Biden brings uncertainty. Social unrest and policy shifts could influence consumer sentiment, the dollar, and stocks.
8. Britain (Due by Jan 2025): Labour’s lead in the polls raises concerns about fiscal policies and economic stability. Changes in taxation and Brexit-related decisions may impact government bonds and currency.
9. Venezuela (2024, TBC): Nicolás Maduro’s advantage in the presidential election, coupled with potential sanctions, could impact Venezuelan stocks and bonds. A debt restructuring may be on the horizon.
As the world watches these elections, the outcomes will undoubtedly shape the global economic landscape. Investors brace for potential shocks, emphasizing the interconnectedness of politics and financial markets.
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Credit: Naomi Rovnick, Jorgelina do Rosario