Emerging market countries face a volatile 2024 as elections from Mexico to Indonesia — and a highly consequential presidential election in the US — look set to influence their future economic performance, adding to the uncertainties for investors in risky assets.
Up to 2bn people could ultimately vote in elections by the end of this year. And electoral contests in emerging market countries India, Indonesia, Mexico and South Africa are expected to inject volatility into investors’ portfolios.
Historically, as lawmakers get anxious ahead of elections, they tend to relax their fiscal discipline to win over voters. But this pre-election policy shift can hurt the creditworthiness of emerging market countries, as well as that of state-owned enterprises.