2019 emerging market elections: The who’s who and the so what…
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👤AXA
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Research & Strategy Insights
As many democratic systems have emerged across developing countries, investors have had to be particularly vigilant around political events, such as presidential and general elections. In numerous emerging markets (EM), election years have historically coincided with a boost in fiscal spending, which has often led to a significant deterioration of what can be already fragile fiscal positions. This in turn has led to an increased dependency on foreign financing that, exacerbated by an acceleration of foreign capital outflows, added pressure on currencies and bond yields. Inevitably, a lot of developing country crises occurred in sync with political cycles. As many emerging markets have seen their democratic traditions develop, the financial and political cycles have decoupled somewhat, thanks to the improved quality of the fiscal and monetary framework.
By
👤AXA
