Right‑wing shift in Latin America. Another country elects a conservative president
Over the past weekend Colombian voters chose right‑wing politician Abelardo de la Espriella as the country’s next president, adding another piece to the series of election results that investors are closely watching across Latin America. Recent elections in Costa Rica, Chile and Peru also produced more conservative outcomes, increasing the likelihood that the region is entering a new political phase. The key test will be the October presidential elections in Brazil.
It is striking that the core concerns are similar across all countries. Latin America has spent a significant portion of the last two decades transitioning from left‑wing to market‑oriented governments, often in response to changing economic conditions.
Currently voters in most of the region focus on security, economic growth, inflation and government effectiveness. For investors elections are merely a starting point. What matters next is fiscal policy, regulation, energy development, infrastructure investment and the approach to private capital.
Chart 1: Latest election results in Latin America (2023–2026)
Source: Western Asset. As of 24 June 2026. Prepared based on data from national electoral authorities, official election results and publicly disclosed information.
Investors seek alternatives and look to Latin American markets
Recent experience shows that local equity, currency and fixed‑income markets often react less to ideology and more to expectations about economic policy. One example is Argentina. Argentine assets reacted positively after the election of Javier Milei, as investors focused on fiscal reform, deregulation and measures to stabilize the economy.
In contrast, Chile and Colombia experienced periods of market volatility when investors began to worry about the potential impact of policy changes on growth, investment, fiscal balance and private sector activity, although many of these reactions eased once governments moved from campaign to governance.
The overall lesson is that investors generally value clarity, predictability and fiscal discipline, regardless of whether a government is perceived as left‑wing or right‑wing.
Brazil will be most important later in the year, as the largest economy and biggest equity market in the region, its elections will likely influence how investors view Latin America as a whole, especially since many are still seeking opportunities beyond the narrow set of themes that have dominated markets in recent years.
These searches take place in a context where Latin America accounts for only a small part of most emerging‑market equity indices (EM), while the bulk of index exposure remains concentrated in Asia.
Asia has AI and chips, but South America has resources
It should be noted that a large portion of the enthusiasm for emerging‑market equities stemmed from interest in artificial intelligence, semiconductors and related topics that favored several of the largest Asian markets, especially Taiwan and South Korea. Latin America largely remained outside this discourse, even though it possesses many resources linked to these themes, including copper essential for electrification, critical minerals for energy systems and infrastructure related to growing energy demand.
None of these circumstances guarantees a flow of capital into Latin America. U.S. foreign policy, a more hawkish stance by the Federal Reserve, a stronger U.S. dollar and geopolitical events remain powerful drivers of capital flows, and history shows that external conditions often matter more than domestic policy when investors decide on capital allocation.
Nevertheless, after several years when investor attention was directed elsewhere, Latin America’s political cycle has once again come into focus, and in the coming months investors may find it harder to ignore the region.
Footnotes
MSCI Emerging Markets Index includes 1,205 companies from 24 countries, but over 80% of its weight is concentrated in Asia (Taiwan, South Korea, China and India), while Latin America accounts for less than 10% of the benchmark (Brazil’s share is 3.9%). Source: MSCI Emerging Markets Index Fact Sheet, May 2026.
It is estimated that Latin America holds 46% of global lithium resources and over 36% of global copper resources. Source: J.P. Morgan, "Latin America 2026: Between Promise and Pressure – Flexibility is the Solution," January 2026.
