Global Risk Indexes (19-12-2024)

Global 89 (+2 ▲)
MENA 98 (+1 ▲)
APAC 91 (+1 ▲)
Europe 89 (+1 ▲)
Africa 82 ( —)
AMERs 79 (+1 ▲)
Markets 92 (+3 ▲)
Mateo Fernandez, Americas region analyst at Worldwise Analytica

Mateo Fernandez

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

Political Unrest, Inflationary Pressures, and Trade Tensions Highlight Risks in the Americas

The Americas grapple with significant political and economic challenges this week. In Canada, Prime Minister Justin Trudeau faces intensifying calls for resignation amid mounting dissatisfaction within the ruling Liberal Party. Finance Minister Chrystia Freeland's resignation has exacerbated internal divisions, with critics citing Trudeau's leadership as a liability ahead of the 2025 elections. Polls project a decisive Conservative victory, intensifying pressure on the Liberal Party to address its governance challenges and economic strategy in response to U.S. tariff threats.

In Brazil, fiscal instability continues to undermine investor confidence. The Brazilian real tumbled to a record low of 6.31 per U.S. dollar, reflecting deep skepticism about President Luiz In'cio Lula da Silva's fiscal reforms. Congressional rejection of stricter rules for the BPC social benefit program has amplified concerns over public debt, which now exceeds 9.5% of GDP. Financial markets remain wary, with credit default swaps at a 14-month high, signaling heightened risk perceptions among international investors.

Argentina's economic outlook shows signs of strain despite marginal GDP growth. While the UN's revised forecast predicts 4.3% GDP growth for 2025, inflation remains a persistent challenge, standing at 166% annually. Poverty rates above 50% and stagnant wages underscore the social costs of President Javier Milei's austerity policies, raising questions about their sustainability as public dissatisfaction mounts.

Trade dynamics in the region are increasingly fraught. The U.S. has escalated trade disputes with Mexico under the USMCA framework, alleging labor rights violations by key manufacturers. Meanwhile, the Trump administration's plans to expedite critical minerals production by waiving environmental reviews could reshape global supply chains, affecting economies reliant on mining exports, including Brazil, Chile, and Canada.

Chile faces continued economic challenges as inflationary pressures persist. The central bank's cautious monetary easing, coupled with weak fixed capital investment, signals structural constraints on sustained growth. Efforts to stabilize inflation, projected to hover near 5% in early 2025, are critical to maintaining economic resilience in the copper-dependent economy.

Short-term risks include political unrest in Canada and fiscal instability in Brazil. Over the long term, effective governance and robust international trade strategies will be essential to mitigating systemic vulnerabilities and fostering regional stability.

Geopolitical Risk Assessment for the Americas
(19-12-2024)

Geopolitical and economic risks across the Americas remain heightened due to political instability in Canada and Brazil, inflationary pressures in Argentina and Chile, and intensifying trade disputes under the incoming U.S. administration. These developments underscore growing vulnerabilities in governance, fiscal policy, and regional trade dynamics.

Geopolitical Risk Index

Developments to Follow for the Americas (See All Global)

Previous Briefings

See all previous briefings