Latin America’s political winds may be shifting

Latin America’s political direction may shift from predominantly left-leaning governments to more centrist and market-friendly administrations over the next two years, with voters in Argentina, Chile, Peru, Colombia and Brazil heading to the polls.

According to Schroders, the upcoming elections are key to the region’s economic trajectory and investment opportunities. “From Argentina’s crucial midterms to Brazil’s high-stakes presidential race, the outcomes will have lasting implications for governance, economic policies, and market confidence,” says Pablo Riveroll, Fund Manager & Global Head of Equities Research at Schroders.

“The early trends make us constructive that the policy pendulum is swinging back to orthodoxy, which would be an important catalyst for the market. Until then, US policies and the dollar are likely be a dominant driver of domestic returns,” Riveroll adds.

While Latin American equities underperformed significantly in 2024, Argentina and Peru already demonstrated that reforms and political stability can positively impact the market, according to Schroders’ insight.

Read the full insight here.