Parsing EM political risk premiums

Political risk has emerged as a key theme of 2026. Our analysis of EM political shocks over the last 15 years suggests that the key determinants of the size and persistence of political risk premiums are the type of event and the extent of economic vulnerabilities. With this in mind, elections in Brazil, Hungary and Colombia appear to have the greatest potential to trigger large moves – both higher and lower – in political risk premiums this year.