By Chrysostomos Tsoufis

2024 is the year of national elections. According to the Reuters analysis, the countries that will enter the process of electing a new government this year together have more than 60% of the world’s GDP and more than half of the world’s population.

Rightly so, the analyzes give and take on the impact on the global economy of the election results, in a world still trying to recover from the twin crises of the pandemic and energy, with wars raging in the Middle East and Ukraine and the consequences of the climate crisis are becoming more and more apparent.

USA

Despite Donald Trump’s legal adventures, everything points to him winning the Republican nomination and facing Joe Biden in the rematch(?) on November 5th.

The first time, the markets quickly recovered from the turmoil that followed Trump’s 2020 defeat and the rout of his supporters on Capitol Hill, will they do it the second time around?

The pre-election climate is expected to be a particularly toxic event which, according to the analyzes of mainly American economists, will negatively affect consumer confidence and the investment climate in an economy that is trying to stand on its feet from high inflation and successive interest rate hikes.

Bipartisan rhetoric heading into the polls about the trade war with China, the spending cuts they’ll commit to or the tax cuts they’ll promise will weigh on stocks, the dollar and inflation. And as Reuters notes, Trump is in favor of even more drilling for oil, which Biden has limited.

EUROPE

Portuguese, Belgians, Croatians, Romanians and Austrians will …visit the polls this year and all analysts are holding their breath as to whether the far-right “wave” that swept the Netherlands will …turn into a “tsunami”.

In Austrian polls, the far-right FPO leads with 30%, in Belgium the Flemish nationalists lead with 25%, in Portugal CHEGA doubles its percentages in the polls to 15%.

The more Eurosceptic voices get stronger, the worse for the economically weakest links in the Eurozone, such as e.g. Italy whose debt is unthinkable but also for the green transition.

TAIWAN

The next day’s – January 13 – elections in Taiwan are perhaps the most crucial as they could potentially lead to another war-torn conflict.

Opposing the Democratic Progressive Party, which is called “schismatic” by China, and the opposition Kuomintang, which supports closer ties with Beijing. A third consecutive victory for the Democratic Party could “stimulate” China further.

Taiwan is the big thorn in Sino-American relations and a constant fear of the markets. A possible Chinese invasion of Taiwan means, according to all analyses, a decrease in global GDP by $1 trillion.

Russia

On March 17, Vladimir Putin is expected to win the presidential election for the 5th time.

He has already warned that any Western involvement in the electoral process will be seen as an act of aggression.

The Russian economy is not particularly affected by Western sanctions as in 2023 it grew according to estimates of more than 3%, but the ruble has lost 1/3 of its value and inflation is close to 8%.

BRITAIN

The year is expected to close with the elections in Britain and probably with a change of guard since the new tenant of Downing Street is expected to be the leader of the Labor party, Keir Starmer.

Labor is taking on the highest debt since the 1960s and comes with an agenda including other changes to the construction industry and, according to Reuters, targeted tax changes that will hit energy companies. At the same time, they want closer cooperation with the EU, positive for those betting on the strengthening of sterling.

south Africa

Since Nelson Mandela brought it to power in 1994, the African National Congress has not known what defeat is. Exactly 30 years later this is expected to change, as allegations of bribery, blackouts, economic turmoil and austerity will result in Congress needing an ally in power. If the ally is a left-wing party and calls for increased social spending, this could lead to higher deficits and even more economic turmoil.
India, Mexico, Venezuela, Indonesia, Pakistan and Uruguay, among others, will still have elections that may have their own effects on world affairs.

In India, for example, Narendra Modi’s ruling party, which is expected to win a third consecutive term, has imposed export bans on rice, sugar and wheat that have affected the global supply chain.

It is no coincidence that in the annual report of the World Economic Forum, the outlook for the next two years for the planet is mostly negative – even worse on a 10-year horizon – with 30% of respondents estimating that conditions will be explosive.

In the top 10 risks to the planet the lack of economic opportunities, inflation and the decline of economic activity along with extreme weather conditions, interstate war conflicts and cyber security.