Global Risk Indexes (12-12-2024)

Global 85 (0 —)
MENA 94 ( —)
APAC 87 (-1 ▼)
Europe 85 (+1 ▲)
Africa 79 (+1 ▲)
AMERs 77 ( —)
Markets 89 (+1 ▲)
Mateo Fernandez, Americas region analyst at Worldwise Analytica

Mateo Fernandez

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

Economic Adjustments and Trade Tensions Define the Americas' Geopolitical Climate

The Americas face intersecting challenges as governments tackle economic pressures, fiscal reforms, and trade uncertainties. In Canada, the Bank of Canada's decision to cut its policy rate by 50 basis points to 3.25% reflects efforts to counteract slow growth and rising unemployment. While Governor Tiff Macklem emphasized that the economy is not in recession, concerns over U.S. tariff threats and subdued GDP growth cloud the economic outlook. Macklem's indication of a more gradual approach to future rate cuts signals caution amidst ongoing trade disputes and fiscal adjustments.

In Brazil, the central bank's aggressive monetary tightening continues with a surprising 100-basis-point rate hike to 12.25%. Policymakers are addressing inflationary pressures amid fiscal concerns tied to President Luiz In'cio Lula da Silva's spending cuts and tax reforms. Public skepticism about the government's fiscal measures highlights broader economic vulnerabilities, as inflation expectations remain elevated despite the tightening cycle.

Mexico is pursuing significant labor reforms to regulate digital platform work. The legislation, approved unanimously in the lower house, introduces protections for gig workers, including social security and minimum wage guarantees. While these reforms align Mexico with international labor standards, they could disrupt business models and increase operational costs for companies like Uber and Rappi.

Argentina shows signs of economic recovery as monthly inflation drops to 2.4%, the lowest in over four years. President Javier Milei's austerity measures are credited for stabilizing prices, but social discontent over wage erosion and high poverty rates persists. While the decline in inflation represents progress, sustaining economic recovery remains a critical challenge for the Milei administration.

Colombia faces fiscal setbacks as lawmakers reject a proposed tax reform aimed at raising 9.8 trillion pesos ($2.24 billion). The reform was intended to fund the 2025 budget, but the government's inability to secure legislative support exposes deep divisions and constraints in managing public finances. The rejection amplifies concerns over the viability of Colombia's fiscal strategy amidst economic stagnation.

Short-term risks include heightened economic strains and legislative gridlocks in Brazil, Colombia, and Mexico. Long-term stability will depend on effective policy implementation and regional cooperation to address structural economic and trade challenges.

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

Geopolitical risks in the Americas remain significant, driven by economic uncertainties, escalating trade tensions, and political challenges. Fiscal and monetary adjustments in Brazil, Canada, and Colombia reflect regional struggles with inflation and growth, while Mexico navigates complex labor reforms and U.S. trade pressures.

Geopolitical Risk Index

Developments to Follow for the Americas (See All Global)

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