CareEdge Global Ratings flags rightward political shift in Latin America

CareEdge Global Ratings has released an assessment of political developments in Latin America, noting a rightward trend reflected in election results in Argentina in October 2025 and Chile in November 2025. The agency stated that elections in the region are a key factor to monitor from a credit perspective, given their influence on fiscal policy, reform priorities, and regulatory frameworks, which affect macroeconomic stability and investor sentiment.

The analysis observed that right-leaning governments in Latin America are increasingly emphasising market-oriented policies and pro-investment reforms aimed at improving business conditions, particularly in Argentina and Chile. These administrations are also focusing on fiscal consolidation through expenditure rationalisation and austerity measures.

Commenting on the developments, Nitesh Jain, Chief Rating Officer at CareEdge Global Ratings, said, “Following the recent rightward shift in politics, we expect faster fiscal consolidation, smoother reform implementation, and improved policy clarity in Argentina and Chile, supported by strong alignment between the executive and legislative branches.”

The report further noted that this rightward momentum could extend to countries holding elections in 2026, including Peru in April 2026 and Colombia in March and May 2026. While both countries may experience a shift in that direction, the contests are expected to be highly competitive, leaving outcomes uncertain.

In Brazil, where elections are scheduled for October 2026, the incumbent left-leaning president is widely expected to be re-elected. However, the degree of political alignment between the president and parliament may differ depending on whether the legislature leans to the right or becomes fragmented.

Mihika Sharma, Senior Economist at CareEdge Global Ratings, added, “The left-leaning governments, such as those currently in power in Brazil, are likely to maintain a focus on labour-friendly policies and wealth redistribution, while prioritising higher social spending. The fiscal consolidation approach by these administrations is expected to rely primarily on revenue-raising measures, including tax reforms, rather than significant spending cuts.”

The agency concluded that political realignments across Latin America in the coming years will be a significant factor in determining fiscal discipline, reform progress, and investor confidence across the region.