Almost 4bn people – half the world’s population – are being called on to vote this year.
Converging trends, geopolitical tensions, social malaise and electoral processes lacking in transparency in more than a few countries mark this period out as uniquely decisive.
Taiwan’s January elections saw the Democratic Progressive Party claim victory, an interesting result given its role in the ongoing dispute between the US and China.
The people of Russia have also voted and, unsurprisingly, Vladimir Putin emerged as the clear winner, with 87 per cent of the vote.
And of course, on November 5, the US votes.
Presumptive Democratic and Republican nominees, Joe Biden and Donald Trump, will face off in a tight race, the outcome of which remains uncertain, with attention focused on Trump's myriad legal problems and the possibility of a reduction in aid to Ukraine.
India’s 969mn voters will also have their say in the country’s mammoth electoral process, which kicked off a few days ago and continues until June 1.
Mapfre Economics, Mapfre's research arm, expects frontrunner and current Prime Minister Narendra Modi and his Bharatiya Janata Party to retain power and possibly expand its majority, while subsequent to the European Parliament elections (June 6-9), it expects Ursula von der Leyen to remain at the helm of the European Commission.
The history of Europe after the second world war is largely characterised by social democratic and conservative parties alternating in government.
We have also seen some grand coalitions in control, particularly in Germany, but in the main, this situation has led to a distinct lack of radical change in economic policies.
No direct effect
I analysed 33 of the most recent elections in Spain, Germany, Italy and France – four of the leading eurozone economies – to compare the evolution of their national indices with the Euro Stoxx 50 three months and 12 months out from their respective elections.
The overriding conclusion is that elections do not influence market behaviour. (The one exception to this objective analysis, Italy, merits further investigation.)
So while we often think election outcomes have a direct bearing on economic performance, the observable reality is that they don’t.
National indices tend to be reasonably diversified in their composition, so it is difficult to foresee how a national index would perform very differently from a European index, given that the positive or negative evolution of any given sector is often offset by the evolution of others.
This situation could change were an extremist party to gain outright control after an election, which, unlikely as it seems, is still a possibility.
Even in such a situation however, dependence on European funds in many cases would prevent them from taking measures against specific sectors that could bring about a very negative performance of the index.
