Could Brazil Be the Next Japan and India?

In recent years the world has experienced two elections in large countries that ushered in new governments pledging dramatic economic reforms and led to surging stock markets. In Japan in December 2012, the election of Shinzo Abe and his Liberal Democratic Party led to economic reforms known as “Abenomics” and big stock market gains in early 2013. In India, the election in May of Narendra Modi and his Bharatiya Janata Party also led to higher stock prices. Could Brazil’s stock market similarly benefit from its upcoming election?

Topics: Japan Blog Political Risk Brazil India

The Rise of Political Risk

One important trend in global financial markets during the last few years has been a rise in political risk, a concept referring to political changes that could affect the value of an investment. The number of events associated with political risk—such as elections, mass protests, and military interventions—has increased by 54% since 2011, according to a study by analysts at Citigroup. This kind of increase has a couple key implications for investors.

Topics: Blog Political Risk Brazil Europe Thailand Ukraine Turkey Russia India Emerging Markets

Will Elections Revive India’s Economy?

After soaring in the middle of the last decade, India’s economy has struggled in recent years. The country’s GDP growth rate has declined from over 10% in 2010 to less than 5% in 2012 and 2013. At the same time the inflation rate has remained close to 10%. Many of the root causes of the economic woes are related to the government: the India suffers from poor infrastructure, stifling bureaucracy, and endemic corruption. Optimists therefore think that India’s election, which started last week and continues until May 12th, could be a turning point for the country’s economy.

Topics: Blog Narendra Modi Elections India