Moody'’s: Upcoming Elections Boost Policy Unpredictability In Latin America

By | February 2, 2018

The approaching governmental elections in Latin America present threats to fiscal and structural reforms in the region, said Moody’s score agency in a brand-new report on the area.

“New governments may be less committed to pursuing enthusiastic reform programs, following a number of years of weak growth. Even if commitment to reform stays, application might be challenging due to lack of political support,” the firm warned.

Moody’s experts noted that corruption claims against elected authorities and weak economic performance throughout the region had fueled discontent with the current governments. “As such, there has actually been a surge in prospects that oppose reforms ahead of 2018 presidential elections in Brazil (Ba2 unfavorable), Colombia (Baa2 steady) and Mexico (A3 unfavorable)– some of them new to politics or unaffiliated with standard parties, promoting policies that tend to be at odds with those advocated by the recognized parties,” said the report.

“Offered the appeal of such prospects in Mexico and Brazil, these 2 countries deal with increased risk of policy turnarounds that could undermine financial combination and structural reform efforts,” Moody’s stated.

In Colombia, despite growing discontentment with the existing federal government, institutional features, in addition to assistance from the leading governmental prospects for prudent financial policies, would contribute to policy connection despite political polarization, inning accordance with the rating company.

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