Global Risk Indexes (11-12-2024)

Global 85 (+1 ▲)
MENA 94 (+1 ▲)
APAC 88 (+1 ▲)
Europe 84 (+1 ▲)
Africa 78 (+1 ▲)
AMERs 77 (-1 ▼)
Markets 88 (+1 ▲)
Mateo Fernandez, Americas region analyst at Worldwise Analytica

Mateo Fernandez

Unraveling the Threads of Americas' Geopolitics: Insight, Precision, Vision

Political Violence and Economic Strains Heighten Instability in the Americas

The Americas grapple with escalating political violence and economic uncertainties this week. In Mexico, the assassination of federal congressman Benito Aguas underscores the persistent dangers faced by public officials amidst a broader wave of violence. Politicians remain frequent targets in a country grappling with cartel-related warfare and governance challenges. The killing has raised renewed concerns about the security strategies of President Claudia Sheinbaum's administration.

Brazil faces fiscal and political uncertainties as President Luiz In'cio Lula da Silva recovers from emergency brain surgery. Lula's health crisis comes at a critical time as his government pushes a fiscal reform package expected to save 70 billion reais ($11.5 billion) over two years. Skepticism from Congress and financial markets about the feasibility of these reforms compounds the challenge. Lula's absence from direct negotiations could further stall legislative progress, raising concerns about fiscal stability in Latin America's largest economy.

In Canada, the Bank of Canada is poised to cut its policy rate amid persistent economic stagnation. Analysts expect a 50-basis-point reduction, which would bring the rate to the neutral range. This move aims to stimulate demand and counter weak GDP growth and rising unemployment, though concerns about potential policy missteps remain high.

Argentina's inflation shows signs of slight resurgence, testing President Javier Milei's austerity measures. November's inflation rate is expected to increase to 2.8%, reversing a steady decline. The uptick, driven by rising food and utility costs, highlights the challenges of sustaining long-term economic recovery under Milei's libertarian agenda. While annual inflation is still projected to decline significantly, public discontent over the social costs of austerity could undermine political stability.

Mexico's labor reforms promise increased protections for gig workers. Approved unanimously in the lower house, these reforms aim to guarantee social security and other benefits for over 658,000 workers employed through platforms like Uber and Rappi. While celebrated as a step forward in workers' rights, the reform raises questions about enforcement and its impact on business models in the digital economy.

Short-term risks include heightened political violence in Mexico and fiscal challenges in Brazil and Canada. Long-term stability depends on addressing structural economic and governance issues while balancing social equity and fiscal discipline.

Geopolitical Risk Assessment for the Americas
(11-12-2024)

Geopolitical risks in the Americas remain elevated due to political violence in Mexico, economic uncertainty in Brazil and Canada, and ongoing health concerns for Brazil's President Lula. These challenges are compounded by regional economic and social pressures, including inflation and labor rights reforms.

Geopolitical Risk Index

Developments to Follow for the Americas (See All Global)

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