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Weekly Commentary

A Bumper Crop of Elections

June 7, 2024
Francis Généreux
Principal Economist

There’s a lot going on politically all over the world right now. Here in Canada, parliamentary sessions are coming to a close, while governments and opposition parties are getting ready to remind voters of what they’ve accomplished. Meanwhile in the United States, all eyes were on New York, where Donald Trump’s criminal trial ended with a conviction. Farther from home, the wars in Ukraine and Gaza are ongoing.

A lot of countries are also holding elections this year. Of course, there’s the US presidential election, which everyone’s talking about. There will be a televised debate between Biden and Trump on June 27. The November 5 election looks like it will be close, and it could be decided by a handful of voters in a few swing states. We’ll talk about it more in the future. In the meantime, let’s take a closer look at key elections further afield that have either just been held or will be held soon. 


The polls have closed in India, the world’s biggest democracy. In a country of 968 million eligible voters, the voting lasted 44 days. The Bharatiya Janata Party and its leader Narendra Modi won the election, but unexpectedly lost their majority. Modi is expected to serve a third five-year term as prime minister of India. But he will do so as the head of a weaker coalition government. The shock result fuelled uncertainty, shaking investors and sending the Indian stock market tumbling this week. India recently overtook China as the world’s most populous nation, and it’s playing an increasingly important role in the global economy. The Indian economy has boomed in recent years, with real GDP growing 7.8% in 2023. But the country still faces many challenges, including persistently low per capita GDP and massive income inequality. Economic and diplomatic relations with several nations, including China, have run hot and cold for some time. On top of all that, the government needs to manage the country’s substantial public debt while also dealing with a number of priorities. These include the fight against climate change, which is significantly affecting vulnerable populations in the Indian subcontinent. 

South Africa

The outcome of the May 24 elections in South Africa was disappointing for the African National Congress (ANC), which has ruled the country since apartheid ended in 1994. It will need to find a coalition partner to stay in power and, as of this writing, was still negotiating with other parties to find one. There are many economic challenges facing South Africa, which continues to be plagued by tepid real GDP growth that amounted to just 0.6% in 2023. The government of outgoing president and ANC leader Cyril Ramaphosa recently introduced economic reforms aimed at attracting investment, but the election result puts those reforms at risk. In addition, growth is still being hampered by a number of constraints, such as glaring infrastructure problems, especially for energy. At 32.9% in the first quarter of 2024, South African unemployment remains excessively high, with huge disparities that are heightening social tensions. It remains to be seen whether a new coalition government will be able to turn things around. 


In Mexico, the big surprise was the scale of Claudia Sheinbaum’s victory. Sheinbaum, the protégée of outgoing President Andrés Manuel López Obrador, went home with nearly 60% of the total vote in the June 2 general election. Her party also won a supermajority in the lower house of Congress and a clear majority in the Senate. Although the unexpectedly narrow victories in India and South Africa stoked market fears, the landslide win by Mexico’s ruling party also sparked uncertainty, as investors are afraid of left-wing reforms that could weigh on markets. That said, the Mexican economy is doing well, with real GDP up 3.2% in 2023 and unemployment at a record low of 2.3%. Mexico has also benefited from reshoring as companies move their supply chains out of China. In fact, the country has recently become the main source of imports to the US. It would be surprising if Claudia Sheinbaum’s government decided to meddle with the policies that have left the economy in such good shape. But security and crime are still problems, with cartels playing a major role in smuggling drugs and people across the country’s northern border, exacerbating tensions with the US government. The situation could get even more complex if Donald Trump returns to the White House.

Elections are also sweeping Europe. They include the European Parliamentary election, which has already begun, and the general election in the United Kingdom on July 4.

European Parliamentary Election

From June 6 to 9, voters in the 27 member states of the European Union (EU) will select the 720 members of the European Parliament. The European Parliament is one of the EU’s main political institutions, along with the European Council (composed of the heads of state or heads of government of member countries), the Council of the European Union (consisting of the ministers of member states) and the European Commission (similar to the council of EU ministers). While the last three decision-making bodies mainly represent the governments of member states, the European Parliament represents the people and is voted in through direct, proportional elections held every five years. Members of the European Parliament (MEPs) have fairly limited powers, as they cannot propose new laws directly. Instead, they can adopt and amend bills submitted by the European Commission. The results of European Parliamentary elections are generally viewed as a natural consequence of each country’s internal political tensions (and an indicator of discontent with each national government) rather than a reflection of a true political platform that spans Europe. That said, the outcome of these elections can still significantly affect the political path followed by the EU. This is because it will determine the share of seats held by different political groups (made up of MEPs from different member states who share the same political leanings). The President of the European Commission is usually chosen by the group that’s won the most seats in Parliament. In addition, the makeup of Parliament may influence the decisions made by the European Commission and determine which bills are ultimately adopted. Various national polls suggest the current election could result in a shift to the right. This could affect the EU’s climate change initiatives and lead to a greater focus on security and immigration, along with a certain economic nationalism.

UK Election

The elections in India, South Africa and Mexico kept the governing parties in power (although to varying degrees of success), and we expect the European Parliamentary election to result in a shift to the right. But it looks like we’ll see the opposite of both these trends in the United Kingdom. After 14 years of Conservative Party rule (albeit with 5 different prime ministers), polls suggest Keir Starmer’s Labour Party will win an overwhelming majority. Brexit isn’t one of the big issues in the campaign, which will end with the July 4 vote. However, the various ways that the different Conservative governments have botched Brexit are nevertheless among the factors boosting support for the official opposition. The UK’s weak economy, which for the most part has underperformed the eurozone and the US since the Brexit referendum, is another big reason why voters are unhappy. As in the rest of the world, the rising cost of living, funding of public services and the fight against climate change are also major campaign issues. Another factor is tensions over migrants crossing the English Channel. Economically speaking, the rapid succession of Conservative governments over the past 14 years and the lack of a clear political vision since the 2016 Brexit vote have undermined investment and growth. The UK economy nevertheless appears to be improving. Real GDP grew at a non-annualized 0.6% in early 2024 after contracting slightly for two consecutive quarters. Furthermore, inflation is cooling, which should allow the Bank of England to start gradually easing monetary policy this summer. But that would be too late for Prime Minister Rishi Sunak to defy expectations and win the election, especially since he also has to deal with Brexiteer Nigel Farage and his Reform party siphoning away votes on the right. 

Taken individually, none of these elections is likely to substantially affect the Canadian economy, and their impact pales in comparison to the US vote in November. But the decisions that these new governments will (or won’t) make—and their willingness to work with one another in the years to come—are still important in a world with no shortage of global challenges over the medium and long term. 

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