The Brazilian runoff on Sunday between Lula da Silva and Flavio Bolsonaro could confirm or halt the rightward shift in the region, where major Spanish firms operate.
According to moncloa.com, this Sunday’s runoff in Brazil between Lula da Silva and Flavio Bolsonaro will decide whether the political shift in Latin America is lasting or just a punitive vote against the current government. For Spanish companies, a significant part of their international business depends on what is decided in that region.
The change began with the arrival of Javier Milei to the presidency of Argentina at the end of 2023. Following that, José Antonio Kast came to power in Chile, Abelardo de la Espriella in Colombia, and Keiko Fujimori in Peru, while Bolivia entered another political cycle.
The popularity of the new governments is wearing thin quickly. According to LatAm Pulse, Fujimori's approval dropped from 42.8% to 28.3% in October, with a disapproval rating of 53.6%. Kast lost ten points in his first month after announcing a rise in fuel prices.
Telefónica, BBVA, Santander, Iberdrola, Repsol, Acciona, and Mapfre have a significant portion of their international revenue in the region. Their sectors, such as telecommunications, banking, energy, and infrastructure, depend on regulators who change with governments.
A change in government can review a concession, freeze an electricity rate, or renegotiate a telecommunications license. It only takes a new regulator and an urgent decree in the first week for a company's balance sheet to be affected.
The Brazilian campaign, according to the cited analysis, has not had a debate on economic programs. The candidates have exchanged judicial accusations without explaining what they will do with the budget, something that energy companies consider before committing capital.
Spain experienced a similar episode in 2012 when the Argentine government expropriated 51% of YPF from Repsol, and Bolivia nationalised Transportadora de Electricidad, a subsidiary of Red Eléctrica de España.
The Latinobarómetro 2026 indicates that 76% of Latin Americans do not feel represented by their congress or assembly, and about 150 million people remain in poverty. Political scientist Steven Levitsky interprets the result as a rebellion against the establishment, and political scientist Marta Lagos summarises it this way:
Today the vote is not ideological; it is pragmatic.
The companies consulted in the analysis recommend strengthening contracts with guarantees of legal stability, international arbitration, and local partners before investing again. The first indication of the direction will come with the composition of the Brazilian Congress and the first fiscal adjustment of the new government.
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