1Q26_ Quarterly Outlook Report_Final_EN - Flipbook - Page 9
T H E P LUMB LI N E | A RETU RN TO F I RS T PRI N CI PL ES
French, German, and British leaders are strongly disliked
net favourability
(favourable - unfavourable)
0
-10
-20
-21
-30
-36
-40
-44
-50
-59
-63
-60
-70
-80
03/25
05/25
France (Macron)
Germany (Merz)
07/25
09/25
Spain (Sánchez)
11/25
Italy (Meloni)
U.K. (Starmer)
Source: YouGov, Scotia Wealth Management.
Our baseline scenario for LatAm GDP growth in 2026 is one of solid, albeit unextraordinary,
expansions in the region’s ‘middle-sized’ economies (Chile, Colombia, and Peru) that will outpace
Brazilian growth, which remains sluggish, and Mexican growth, which continues to significantly
underperform. Inflation risks remain tilted to the upside in the region (i.e., there is a greater risk
of inflation coming in above expectations than below) but not enough to dissuade officials from
additional policy easing; instead, they are focused on determining how many cuts they will
announce despite the risk of making a ‘policy mistake.'
Regional economic and market outcomes for 2026 (and possibly further out) hinge on the leadup to, and results of, elections. Chile kicked off the election season with a December runoff victory
for the conservative candidate, José Antonio Kast. A pivot to the political right for Chile could well
be echoed in Peruvian and Colombian elections in April and May, respectively, resulting in regional
pendulum swings from left-wing populist governments to right-wing governments (some with
their own degree of populist appeal). Despite these contests being only a few months away, the
field of candidates is far from narrow, leaving the political future of these countries up in the air
at writing.
Regional Political Balance Hinges on Upcoming Elections
Previous government
Current government
Term start-end
Mexico
Lopez Obrador (left)
Sheinbaum (left)
2024-2030
Chile
Boric (left)
Boric (left) outgoing for Kast (right) in March
2026-2030
Argentina
Fernandez (left)
Milei (right)
2023-2027
Ecuador
Lasso (right)
Noboa (right)
2023-2025 & 2025-2029 (reelected)
Bolivia
Arce (left)
Paz (right)
2025-2030
Uruguay
Lacalle Pou (right)
Orsi (left)
2025-2030
Paraguay
Abdo (right)
Peña (right)
2023-2028
Incumbent government
Election outlook
Election date, term start-end
Colombia
Petro (left)
Govt has ~40% approval vs 55% disapproval
May/June 2026, 2026-2030
Brazil
Lula (left)
Lula 5-15ppts lead in polls vs candidates from the right
October 2026, 2026-2030
Peru
Jeri (left)
Unclear, long list of contenders
April 2026, 2026-2031
More business-friendly presidencies and legislatures would prove supportive for financial and
direct external investment flows, which may have kept their distance from LatAm in recent years.
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