Dear readers,
This week’s edition provides an analysis on three presidential elections coming up in the next six months, starting with Peru’s presidential elections on April 12.
Beyond the electoral analysis, this week's Market Intelligence covers critical minerals, EV manufacturing, fintech and a landmark Mercosur-Canada trade deal, alongside key macro updates from Argentina, Paraguay and Venezuela
❐ STRATEGIC OUTLOOK
Three Elections, One Region: Latin America's 2026 Political Calendar
Between April and October 2026, three of Latin America's most important economies will elect new presidents. Peru votes on 12 April, Colombia holds its first round on 31 May and Brazil follows in October. Together, these three countries account for more than 55% of the region's GDP.
All three elections are taking place against a backdrop of fiscal pressure, the Iran oil shock, and a political realignment that accelerated with Milei in Argentina, Noboa in Ecuador, and Kast's inauguration in Chile this month. But as the Colombian case illustrates, that realignment is not a foregone conclusion. The outcomes of these three races will determine the evolution of the region's current investment-friendly environment.
Since 2016 and the election of Pedro Pablo Kuczynski, Peru has had seven different presidents
Peru: first test, highest uncertainty (12 April)
Peru will elect its new president on April 12, 2026, after José Jerí was removed from office by Congress in February, making him the country's seventh president in nine years. The race is deeply fragmented, but two right-wing candidates have polled atop a crowded field of 35 presidential hopefuls. Keiko Fujimori, running for the fourth time, having made the last three runoffs, holds steady at 11-13% across polls. She has pledged to deploy troops and military intelligence to combat street violence, place the military temporarily in charge of the prison system, and launch a "deregulatory shock" for the economy. Rafael López Aliaga, the former Lima mayor who styles himself as Peru's version of Trump and Milei, polls at 9-12%. He has vowed to slash red tape, shutter most government ministries, deploy troops to borders, and use military courts for civilian prosecutions.
Both candidates face active legal investigations: Fujimori over her party's ties to corruption during her father's presidency, López Aliaga over allegedly illegal municipal bonds worth $1.1 billion issued during his time as Lima's mayor.
Left-wing economist and former central bank director Alfonso López Chau has risen to 6.5% from 5.1% in the prior poll, closing in on the two frontrunners.
A runoff between the two right-wing leaders is the most probable scenario, but analysts warn that the next president could come to power with very weak initial legitimacy, facing an equally fragmented bicameral Congress that could deepen political instability and legislative gridlock.
In Peru, 75% of citizens believe the candidates do not understand their real problems, yet the economy tells a different story. Peru's GDP expanded 3.54% year-on-year in January, driven by increased production of copper, zinc, gold and silver. The country's public debt stands at 32% of GDP, inflation at 2.2%, and the IMF recently praised its macroeconomic management. The paradox is stark: a country with some of Latin America's best macro fundamentals cannot translate institutional credibility into political stability.
A symbol of this paradox, a $64 billion mining project pipeline sits largely unlocked, not for lack of resources, but for lack of governance capacity to manage permitting and social conflict. A Fujimori or López Aliaga victory would both signal mining-friendly regulatory intent but their ability to deliver will depend on building a governing coalition in a bicameral Congress where no party holds a majority. Peru returns to a Senate for the first time since 1992, adding a new layer of legislative complexity to an already fractured political landscape.
Colombia: the race no one can call (31 May)
Colombia's May 31 first round is the most analytically complex contest of the three. Three candidates are viable, with trajectories moving in opposite directions. The surprise of the cycle has been Paloma Valencia's rise from 4% to 22% following her center-right primary win on 8 March. A March GAD3 poll places her in a statistical tie with Cepeda in a hypothetical runoff at 43%-40%, making her the only candidate capable of putting the left in difficulty in the second round.
But the left should not be counted out. Petro's approval has recently approached 50%, double his rating of eighteen months ago, following a nearly 23% minimum wage hike and a significant expansion of public investment reaching over 1,000 municipalities. This rebound benefits Cepeda, whose message on inequality resonates well beyond Petro's traditional base. However, reports last week of a US Justice Department investigation into possible links between Petro and drug traffickers, which Petro has denied, could influence the campaign.
The energy sector is the most exposed to the electoral outcome. A Cepeda victory means policy continuity and an accelerating reserve depletion crisis. A Valencia or De La Espriella victory opens the door to fracking and new exploration licenses, but both lack a detailed energy programme. The 31 May result will be the most important energy policy event in Colombia since 2022.
Brazil: the election that will define the region (October)
Brazil's October election is the most consequential of the three and as of this week, the most uncertain it has ever been. The BTG Pactual/Nexus poll of 30 March places Lula between 39 and 42% in the first round and Flávio Bolsonaro at 38-39%. Lula and Flavio Bolsonaro would be tied at 46% in a second round. Both candidates carry rejection rates above 55%, and no third-way candidate surpasses 10%. The trajectory tells the real story: Flávio has gained nearly 10 points since January while Lula has declined by a similar margin.
Flávio is adopting a more moderate tone than his ex-president father, focusing on technical criticism and centrist outreach, while signalling an economic programme of tax cuts, spending control and fiscal discipline. Lula has responded by mobilising the historic PT old guard into a structured campaign machine. Jair Bolsonaro has been recently authorized to serve his 27-year sentence in house arrest due to poor health conditions. His situation could reinforce the political persecution narrative that energises the Bolsonaro base.
A Flávio victory would likely mean a return to market-friendly fiscal policy and closer alignment with Washington. A Lula fourth term means continuity, with a fiscally constrained government entering its final political cycle. Either way, Brazil's fiscal trajectory remains the region's single most important macro variable for borrowing costs, Petrobras dividends, and infrastructure investment.
🎯 Strategic perspective
Three elections, three pivots, each with direct implications for specific sectors and asset classes.
The most actionable insight for investors is not who will win; it is what each country can realistically deliver given its institutional constraints. Peru's political instability will likely remain and the mining pipeline project will not unlock overnight. Colombia's energy deficit will not resolve without sustained private capital. And Brazil's fiscal trajectory will remain the region's dominant macro variable whatever the election result.
The next seven months will test whether Latin America's current investment window is structurally durable or merely a political cycle that happened to align.
❐ MARKET INTELLIGENCE
❍ AGRIBUSINESS & FOOD SYSTEMS
Southern Cone: High phosphate prices to curb regional fertilizer imports
War in the Middle East has driven phosphate prices to Argentina, Uruguay, and Paraguay to their highest levels since 2022, with Moroccan MAP netting forward as high as $900/t CFR. While import volumes were stable through early 2025, a slowdown is expected as grain prices fail to keep pace, leading farmers to delay purchases or skip applications to preserve affordability. (Argus Media)Brazil: Ministry begins talks with China over soy inspection rules
A Brazilian delegation in Beijing has opened negotiations with Chinese authorities regarding phytosanitary inspection rules for soybeans. The move follows complaints from exporters that strict Chinese demands regarding weed presence are complicating certification. While some reports suggested an immediate relaxation of rules, the Ministry clarified that discussions are ongoing and no final decision has been reached. (Successful Farming)
❍ MINING & CRITICAL MINERALS
Chile: Seawater to meet 67.6% of copper mining water demand by 2034
According to a new Cochilco study, seawater will consolidate its position as the primary water source for Chile’s copper sector over the next decade. Driven by the need to reduce pressure on scarce continental resources in northern regions, seawater usage is projected to rise from 40.7% in 2024 to nearly 68% by 2034 as new desalination plants and pumping systems come online. (COCHILCO)"Lithium Triangle" mission seeks trinational sustainability standards
Chile will lead the "Misión III Entre Mundos" in April 2026, a trinational tour connecting the Atacama, Uyuni, and Olaroz salt flats. The initiative aims to create the Trinational Andean Lithium Consortium (CTLA) and launch the "LIFE Seal" for green lithium, establishing shared global standards for sustainability and indigenous community involvement in a region holding 50% of global resources. (Info Mineria)Bolivia: Government activates mining reform with World Bank backing
Bolivia has launched a comprehensive reform of its mining sector to modernize regulations and improve legal certainty for investors. Following a strategic mission to Canada and the US, the government has engaged with 20 international firms interested in silver, zinc, and copper projects, aiming to catch up with regional neighbors in attracting capital for the energy transition. (Bolivian Government)Venezuela: US eases sanctions on gold and mineral exploitation
The US Treasury (OFAC) has issued three new licenses facilitating transactions related to Venezuelan minerals, including gold and rare earths. Following the removal of the previous administration, Washington is reopening doors for foreign investment in the Arco Minero region to secure supply chains for critical minerals used in technology production. (DW)
❍ ENERGY & SUSTAINABILITY
Chile: Fuel prices surge 32-58% as Iran shock ends decade of subsidies
Chile has implemented its largest fuel price increase in recent history, with gasoline rising 32% and diesel 58%, as the government adjusted its SIPCO subsidy mechanism in response to the Iran-driven oil price surge. The hike gives Chile some of the highest fuel costs in the region and adds direct upward pressure on inflation, complicating the fiscal consolidation agenda of the newly inaugurated Kast administration. (Yahoo Finance)Latin America: renewables meet 68% of new electricity demand in 2025
A new OLADE report confirms that 68% of newly installed capacity across Latin America and the Caribbean was renewable in 2025, with wind and solar accounting for 61% of new generation capacity. Brazil commissioned 63 new solar plants (2,816 MW) and 43 wind farms (1,826 MW) during the year. Chile reached 38.6 GW of installed capacity with 50% from non-conventional renewables, and now operates 1.6 GW of battery storage (a regional benchmark). Argentina has 7,798 MW of operational renewable capacity with strong investor appetite returning post-RIGI. (OLADE)
❍ MANUFACTURE & INDUSTRY
Latin America’s EV market surges: BYD secures 100,000 orders
Chinese EV giant BYD is experiencing a massive demand surge, with Mexico and Argentina placing a combined order for 100,000 units to be produced at its new plant in Bahia, Brazil. BYD dominated 70% of the Mexican EV market in 2025, and the Brazilian production hub allows it to bypass high import tariffs through Mercosur trade agreements. (LATAM Mobility)Guatemala: Yazaki expands with second plant, creating 3,500 jobs
Japanese automotive supplier Yazaki is inaugurating a second manufacturing facility in Ayutla, San Marcos, near the Mexican border. The expansion solidifies Guatemala’s role in the global automotive value chain and marks a record period for FDI, which is projected to reach $1.8 billion next year under the Arévalo administration. (Infobae)Argentina: Textile sector sounds alarm as imports surge
The Argentine textile industry is operating at only one-third capacity as the Milei administration’s trade liberalization allows an influx of cheap imports from platforms like Shein and Temu. Since late 2023, the sector has shed 18,000 jobs, with local producers warning that high domestic taxes make it impossible to compete with Asian manufactured goods. (Portafolio)
❍ INFRASTRUCTURE, TRANSPORT & LOGISTICS
Panama/Costa Rica: MOU signed for Central American Railway Corridor
Panama and Costa Rica have formalized a cooperation agreement to develop a binational railway logistics corridor. The 475km project, with feasibility studies led by AECOM, aims to integrate regional ports and free zones, positioning the interior of both countries as a central hub for North-South trade. (Government of Panama)Colombia: Mercado Libre to invest $600M in logistics infrastructure
Mercado Libre has announced a $600 million investment in Colombia for 2026 to accelerate the construction of new distribution centers. The goal is to optimize delivery times for its 8 million local users and 30,000 SMEs, following a year where the platform moved over 110 million packages in the country. (Las 2 Orillas)
❍ DEFENSE & SECURITY
Colombia: government approves $3.2B modernisation plan following crash
The Colombian government authorized a landmark investment of 13 trillion pesos (approximately 3.2 billion USD) to upgrade the operational and technological capabilities of the Public Force. The budget is allocated to the National Army (44.9%), the Navy (26.5%), the National Police (18.3%), and the Aerospace Force (10.2%). Key acquisitions include anti-drone systems, strategic transport aircraft, vessels, and advanced intelligence technology to combat narcoterrorism and organized crime. This move follows the recent tragic crash of a military Hercules aircraft in Putumayo. (RTVC)
❍ HEALTH & LIFE SCIENCES
Mexico: landmark digital health law enters force
Mexico enacted a landmark digital health amendment in 2026, making it the first country in Latin America to create a comprehensive regulatory framework for telemedicine, AI-assisted diagnostics, and digital therapeutic devices. The law, passed under the Sheinbaum administration, creates a structured pathway for international health tech companies to enter the Mexican market and aligns with broader efforts toward regulatory convergence with the US and Canada ahead of the USMCA review. It positions Mexico as a potential hub for digital health investment alongside its established medical device manufacturing sector. (Lexology)
❍ TECHNOLOGY & INNOVATION
Ecuador: Claro announces $600M investment for 5G rollout
Daniel Hajj, CEO of América Móvil, met with President Daniel Noboa to confirm a $600 million investment in Ecuador over the next three years. The funds will focus on modernizing networks and expanding 5G coverage, which is already active in major cities like Quito and Guayaquil. (Forbes)Central America/Caribbean: Fintech dominates "Top 20 Startups to Watch"
A new ranking by Startuplinks reveals that fintech accounts for 45% of the most successful startups in the region. El Salvador and Costa Rica lead the ecosystem, hosting 60% of the top companies, including notable players like Huli (Healthtech) and Boxful (Logistics). (Bloomberg Linea)
❍ FINANCE & BANKING
Mexico: Walmart reviews strategy for Cashi fintech after technical delays
Walmart de México (Walmex) is reassessing its fintech vertical, Cashi, citing regulatory and technological challenges. While the company continues to offer credit through partnerships, it is reconsidering its "open loop" banking strategy and potential alliances after leadership changes in its financial services division. (Bloomberg Linea)
❍ TOURISM, CULTURE & CREATIVE INDUSTRIES
Mexico: Sargassum records threaten Caribbean Easter season
Oceanographers warn that 2026 will be a record year for sargassum, with over 13 million tonnes spotted in the Atlantic in February alone. Barriers and Navy cleanup protocols have been activated in Cancún and Tulum to protect the vital tourism industry ahead of the peak April holiday period. (Mexico News Daily)
❍ TRADE & INVESTMENT POLICY
Mercosur/Canada: Free-trade agreement expected by late 2026
Negotiations for a Mercosur-Canada FTA are moving at "record speed" as both sides seek to diversify trade away from the US. A deal is anticipated by September 2026, which would grant Mercosur beef and soy exporters expanded access to the Canadian market while attracting mining investment to South America. (Reuters)Colombia/Ecuador: Trade war escalates amid security tensions
The relationship between Bogotá and Quito has deteriorated into a "tariff war" following President Noboa’s imposition of a 50% "security tariff" on Colombian goods. Colombia responded with reciprocal duties on 185 products. Tensions are fueled by a trade deficit and Ecuadorian claims that Colombia is not doing enough to secure the shared border against narcotrafficking. (DW)
❐ POLICY & MACRO WATCH
Argentina: Government wins "historic" $16B victory in YPF lawsuit
In a major legal breakthrough, a US appeals court reversed a $16.1 billion judgment against Argentina regarding the 2012 nationalization of YPF. The ruling removes a massive financial shadow over the Milei administration, potentially clearing the country's path back to international capital markets. (Bloomberg)Colombia: Interest rates on public debt hit record 14.03%
The Colombian Ministry of Finance recently auctioned $1.5 trillion in TES bonds at a historic 14% interest rate. Analysts warn that these "exorbitant" financing costs, which are the highest in decades, will strain the national budget and potentially crowd out private investment as the country’s debt-to-GDP remains high. (Infobae)Paraguay: Economy grew 6.6% in 2025, the fastest in 12 years
Paraguay exceeded its growth targets in 2025, driven by record corn production (+10.5% in agriculture) and hydroelectric energy generation (+10.9%). The country is increasingly seen as a regional "investment magnet" due to its low 10-10-10 tax system and stable macroeconomics. (Infobae)Costa Rica: "Strong Colón" creates economic paradox
The Costa Rican colón has appreciated significantly, hitting 20-year highs against the dollar. While this aids those with dollar-denominated debts and reduces the cost of sending remittances, it has slashed the purchasing power of exporters and those with dollar-based salaries by up to 33% since 2022. (Confidencial)Venezuela: Interim President replaces military high command
Delcy Rodríguez has replaced all senior military commanders as part of sweeping reforms to reshape the armed forces following the US-led ousting of Nicolás Maduro. The move aims to consolidate power and align the military, which controls vital oil and food distribution sectors, with the new interim administration. (France 24)
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