Global Elections in 2024: Impact on Financial Markets and Investments

How 2024 Global Elections Are Shaping the Financial Markets

(This story has been refiled to fix the headline and the order of graphics)

By Libby George and Dhara Ranasinghe

April 10 (Reuters) – Voters in Hungary could deliver a boon to bond investors, while Peru’s weekend polls will help determine the next step for its economy, the latest in a string of key elections worldwide this year.

Key Elections Impacting Financial Markets in 2024

Here’s a look at the races financial markets are watching most closely:

Hungary: A Potential Shift in Economic Policy

HUNGARY

Election Dynamics and Market Implications

Sunday elections in Hungary pose the biggest threat so far to nationalist Prime Minister Viktor Orban’s 16-year rule. Centre-right opposition party Tisza is leading in most polls.

Orban has cut taxes and hiked wages to placate voters in an economy where growth has lagged its neighbours. He has also angered much of Europe by blocking loans to Ukraine.

EU Funding and Asset Appreciation

A win for Tisza’s Peter Magyar, investors say, could enable access to some of the 18 billion euros ($21 billion) of EU funding that has been frozen due to concerns over democratic standards.

Goldman Sachs economists say this would “likely lead to a notable appreciation of Hungarian assets.”

Peru: Economic Stability Amid Political Uncertainty

PERU

Presidential Election and Economic Outlook

In Peru, two right-wing candidates lead the polls for Sunday’s first-round presidential election, but Bank of America said most contenders “do not seem to represent a major threat” to Peru’s orthodox economic model. Voters will also elect members of Congress.

The country has had eight presidents since 2018, after years of impeachments and corruption scandals, but growth in nearly all sectors has boosted the economy.

Risks of Capital Flight

Bank of America warned that a chaotic election, like the 2021 race that was marred by turmoil and fraud allegations, could trigger capital flight.

If no candidate clears the 50% threshold, a second round is scheduled for June 7.

United Kingdom: Local Elections with Global Attention

UNITED KINGDOM

Political Landscape and Market Sensitivity

Local elections don’t usually attract the attention of foreign investors but those in the UK on May 7 might well. Prime Minister Keir Starmer’s Labour Party is trailing the populist Reform UK and the left-wing Green Party in the polls and has struggled to deliver on promises to boost economic growth.

The bond market is especially sensitive to signs that the fiscally restrained Starmer might be replaced, while the pound could weaken.

Potential Leadership Changes

The Iran war has dampened speculation that Starmer will be ousted soon. Still, online prediction market platform Polymarket gives a 56% chance of such a move by year-end. The next national election must be held by August 2029.

Colombia: Uncertainty and Investor Optimism

COLOMBIA

Presidential Race and Economic Policy

Colombia’s presidential race – the first round is scheduled for May 31 – remains open after divided results in March congressional elections.

Current leftist President Gustavo Petro has clashed with the central bank and sought to enact an economic emergency decree. Some investors have cheered the rising fortunes of centre-right candidate Paloma Valencia.

Market Outlook

“We are inclined to hold a constructive view, as political conditions still support a swing toward pro-market policies,” Barclays economist Alejandro Arreaza said in a note.

Ethiopia and Zambia: Elections Amid Economic Reforms

ETHIOPIA AND ZAMBIA

Debt Defaults and Economic Prospects

Ethiopia and Zambia, which have both defaulted on their debt, hold summer elections, with the economy a top concern.

Investors have hailed Zambia’s economic reforms and growing copper production, while rising gold and coffee exports and foreign exchange reforms have boosted Ethiopia’s prospects.

Election Outcomes and Risks

Ethiopian Prime Minister Abiy Ahmed’s Prosperity Party is almost certain to win in June amid opposition boycotts and security concerns that could hinder voting.

Zambia’s incumbent President Hakainde Hichilema is also tipped to win in August, but energy and fertiliser price spikes related to the Iran war could hurt. Ratings agency S&P says the election poses a risk to policy continuity, just as the government’s fiscal consolidation efforts start to bear fruit.

Israel: Political Turbulence and Market Volatility

ISRAEL

Referendum on Leadership

Parliamentary elections in Israel, expected in October, are viewed as a referendum on Prime Minister Benjamin Netanyahu.

Polling before the Iran war suggested that Netanyahu’s right-wing coalition would struggle to win enough seats to form a government, and polls showed the war in Iran has done little to improve his standing.

Economic Implications

Israel’s economy had rebounded in 2025, and was expected to further improve in 2026, before the war began. The uncertainty could add to volatility in the shekel currency and government bonds.

Brazil: Economic Challenges and Political Showdown

BRAZIL

Presidential Race and Economic Performance

Brazil’s leftist President Luiz Inacio Lula da Silva is tied in an October race against right-wing senator Flavio Bolsonaro, the son of former President Jair Bolsonaro.

Seats in the lower house, two-thirds of the Senate and all 27 state governors are also up for grabs.

Inflation has moderated and joblessness hit a record low in December, but last year’s 2.3% economic growth was the weakest since the COVID pandemic, and household debt service is at its highest since the series began in 2011.

Market Scenarios

Oxford Economics’ Felipe Camargo said a centre-right government under Bolsonaro could yield a “goldilocks scenario for markets” including a focus on lowering inflation and reversing a growing debt-to-GDP ratio.

United States: Mid-Terms and Market Uncertainty

UNITED STATES

Congressional Control and Economic Sentiment

The November mid-term elections will determine who controls Congress and are shaping up as a major test for U.S. President Donald Trump.

Trump’s approval ratings have hit their lowest level ever, leaving his Republican Party at risk of losing its narrow majorities in Congress. Polls show sizable majorities of Americans are opposed to the war in the Middle East and frustrated by the rising cost of gasoline.

Potential Impact on Dollar and Stocks

Analysts say uncertainty ahead of the vote could weigh on the dollar and stocks, although for now the election is likely to be overshadowed by Iran.

“If Trump wants a chance to get affordability back down, well in advance of the midterms… the timing is very tigh