Unwinding the tide: Latin America's shift to the political right
Summary
Left-leaning policy platforms gathered momentum across Latin America after COVID, sparking the region's second "Pink Tide" political phenomenon. However, those same administrations have seen approval ratings decline and overall popularity falter more recently. Over the next 18 months, most major Latin American nations will host elections, and in our view, regional politics will shift to the right side of the political spectrum. As the political pendulum moves right, we expect the second Latin American "Conservative Wave" to improve longer-term political risk profiles as well as bring about regional financial market stability. But before the "Conservative Wave" fully forms, policies that typically generate regional financial market instability are likely to be pursued in full force, which in the interim, can create short-term volatility across regional and local financial markets.
Author
Wells Fargo Research Team
Wells Fargo
