Americas

During the quarter, elections in territories covering a joint population of more than 2 billion will determine the political and economic direction of some of the world’s largest economies.

Quarterly

Global Trends

Inflation in advanced economies will continue to decline in the context of stable-to-weaker economic activity and labor markets as major central banks approach a start to interest rate reductions. The prospect of a U.S. soft landing, or substantial disinflation in the context of continued economic growth, will remain intact, with the U.S. economy continuing to register fair economic growth and mild disinflation. By contrast, growth in Europe will remain very weak and may even slow further due to significant headwinds in its largest economy, <a href="/article/where-germanys-budget-crisis-headed">Germany</a>. Inflation in the United States and Europe will continue to decline amid restrictive monetary policy. In the U.S. and European banking systems, commercial real estate-related losses will remain a concern because of weak post-COVID-19 demand for office space, and especially because of medium-sized and nonbank financial institutions&#39; significant lending to the sector. The risk of a systemic banking sector crisis involving important banks remains low, however, because large, <a href="/article/assessing-risk-us-financial-crisis-following-svb-collapse">systemically important banks</a> remain well-capitalized and their commercial real estate-related lending is relatively small. The risk of <a href="/article/challenges-eurozones-long-term-debt-sustainability">sovereign debt distress</a> in the euro area (which is already low) will become even less likely as interest rates begin to decline. The Federal Reserve and the European Central Bank will begin cutting interest rates toward the end of the second quarter or shortly thereafter. The prospect of monetary easing will make it easier for <a href="/article/global-economic-fallout-us-and-europes-inflation-woes">distressed developing economies</a> to tap international bond markets, which will make their financial situation more manageable. Financially challenged sub-Saharan Africa will be the greatest beneficiary, but other regions will also benefit from increasing capital inflows and easier financing conditions.

Growth Will Remain Stronger in the United States Than in Europe, Japan

Uncertainty surrounding China&#39;s economic and financial outlook will continue, but the authorities will take measures to ensure against downside growth risks, deflation and, especially, financial risks. China&#39;s <a href="/article/chinas-great-economic-rebalancing-part-1-problems">economic rebalancing</a> will continue to weigh on local government spending, consumer confidence and financial market sentiment, but the authorities will be able to preserve systemic economic and financial stability. The risk of deflation and weak economic activity will persist, which will lead the government to provide continued, incremental support to stabilize the real estate market, not to revive it. The central government has enough fiscal space and the central bank has sufficient scope to increase fiscal spending and lower interest rates to support economic growth should economic growth slow dramatically. Pervasively low inflation or deflation &mdash; a reflection of a relative lack of domestic demand and overcapacity &mdash; will lead to increasing exports, which will lead to higher trade surpluses and increase trade tensions with its main trading partners, the European Union and the United States, without necessarily leading Brussels or Washington to take concrete action. Meanwhile, a failure to resolve the economic uncertainty will weigh on foreign investment, as will non-Chinese and, less so, Chinese company, attempts to <a href="/article/how-will-eus-de-risking-strategy-toward-china-evolve">reengineer their supply chains</a> on the back of international diplomatic tensions. A deteriorating business climate and a more <a href="/article/despite-slowed-chinese-growth-global-economic-power-continues-shift-toward-asia">modest medium-term growth outlook</a> will continue to make China relatively less attractive as a destination for <a href="/article/what-make-chinas-falling-foreign-investment-flows">foreign investment</a>. So while China will continue to attract foreign investment, the growth of foreign investment will move toward a structurally lower level.

China Will Struggle to Revive Its Fortunes

Yemen&#39;s Houthi militant group will maintain a relatively <a href="https://threatlens.stratfor.com/content/yemen-houthis-escalate-attacks-military-and-commercial-ships" data-content-type="lens_incident_report">high tempo of attacks</a> on shipping in the Red Sea, causing more port congestion and shipping delays and keeping shipping costs relatively high, but the region&#39;s crisis will not significantly affect oil production. Israel&#39;s Rafah offensive and its lengthy occupation of Gaza will drive the Houthis to maintain a relatively high cadence of drone and missile strikes targeting ships traversing the Red Sea. The United States and United Kingdom will degrade Houthi capabilities through a frequent air and naval defense campaign. This will progressively reduce the Houthis&#39; ability to maintain their attack tempo, but in the second quarter will only moderately reduce the overall threat to ships, as the Houthis will still launch dozens of missiles and/or drones and occasionally hit ships. The sustained Houthi threat will keep most Western shipping companies, particularly ships with ties to the United States and Israel, using longer routes to avoid Houthi attacks. This will cause shipping delays and disruptions at the start of the quarter, but as supply chains adjust, those disruptions will decline. Europe&#39;s manufacturing sector will be the most affected, with the occasional idling of plants there possible. While regional tension will remain high, Saudi Arabia and other Gulf countries will not back U.S. efforts in Yemen &mdash; and the U.S. and Iran will seek to refrain from significant escalation in Iraq &mdash; limiting the impact on Middle Eastern oil production.&nbsp;

Tensions in the Middle East Drive Continued Global Shipping Disruption 

The U.S. presidential campaign will reduce the probability of additional aid for Ukraine and increase the probability of trade disruptions with Mexico. With former President Donald Trump focusing his election campaign on President Joe Biden, he will work to convince House Republicans to oppose any measures supported by Biden, particularly on <a href="https://threatlens.stratfor.com/content/mexico-military-deploys-ciudad-juarez-violence-surges" data-content-type="lens_incident_report">foreign and border policy</a>. This will make it harder for the United States to <a href="/article/ukraine-grapples-prospect-waning-western-support">approve aid for Ukraine</a>, undermining Kyiv&#39;s ability to withstand Russia&#39;s military offensive after the spring thaw. Trump and House Republicans are also unlikely to reach a bipartisan agreement on immigration and border security, as this would give Biden a victory on the crisis at the border that Republicans have long accused Democrats of causing. The lack of bipartisan cooperation on the immigration crisis will also make border trade disruptions more likely, as the Republican-led <a href="https://threatlens.stratfor.com/content/us-mexico-migrant-smugglers-disguise-their-vehicles-legitimate-cargo-transport" data-content-type="lens_incident_report">Texas state government</a> may reimplement border screening requirements that delay shipments from Northern Mexico &mdash; the country&#39;s manufacturing hub &mdash; which could affect agricultural, automotive and electronics sector trade. Finally, Trump&#39;s first criminal trial will likely begin this quarter and a verdict could occur this quarter, resulting in increased political violence in the event he is convicted. &nbsp;

U.S. Election Season Will Impact Aid for Ukraine

Eurasia

Russia will make tactical gains in Ukraine as Kyiv struggles with shortages of manpower and equipment, but a strategic breakthrough will not occur due to Moscow&#39;s own constraints. Capitalizing on Kyiv&#39;s delay of unpopular mobilization measures and ammunition shortages amid diminished Western support, Russian forces will take <a href="/article/bracing-protracted-war-ukraine-ukraines-challenge-2024-and-beyond">new offensive actions</a> and likely make tactical advances along the front. This is most likely around Robotyne to erode the gains that Ukraine made during its summer 2023 counteroffensive, behind Avdiivka to capitalize on weak Ukrainian defenses in the area, and around Kupiansk to better threaten the Kharkiv region with destruction and annexation in the months and years ahead. While the strategic value of these territorial gains will be minimal, they could reduce Western willingness to support Ukraine in the coming months and demoralize the Ukrainian people and army. Western material support for Ukraine <a href="/article/takeaways-zelenskys-latest-trip-washington">will not suffice</a> to prevent Russian gains, and even if a new U.S. aid package is passed during the quarter, it will not be disbursed quickly enough or be large enough to boost Ukraine&#39;s position during the quarter. This picture means Ukraine will increasingly focus on taking the war inside Russia, stepping up attacks on energy and transport infrastructure to show that it is capable of imposing costs on Russia even as its position on the battlefield becomes increasingly tenuous.&nbsp;

Russia Makes Tactical Gains Against Degraded Ukrainian Forces 

Both Russia and Ukraine will make domestic changes to prepare for long-term conflict, but neither will experience political instability. Emboldened by Russian President Vladimir Putin&#39;s <a href="/article/putins-reelection-clears-way-domestic-measures-continue-war-effort">record share of the vote</a>&nbsp;in the March presidential election, the lack of significant domestic or international response to the death of opposition leader Alexei Navalny in February, and by the <a href="/article/what-make-deadly-terrorist-attack-moscow">March 22 terrorist attack</a>, the Russian government will <a href="/article/ukraine-wars-impact-russia-two-years">use repressive measures</a> aimed at limiting access to outside information and suppressing regime critics. The Kremlin will also consider more manpower and economic mobilization measures (such as forcing men into the army or civilian industries to switch to war production) so it can more credibly threaten &mdash; or actually secure &mdash; a military victory over Ukraine in the years ahead, but may forgo a major mobilization policy adjustment during the quarter amid the belief that its current strategy is already succeeding and to avoid worsening associated economic drawbacks, sticking to demonstrative actions and adjustments of the security apparatus to respond to the March 22 terrorist attack. For its part, Ukraine will likely pass a new mobilization law to bring more men into the army after months of deliberations between the Rada and the presidential administration. But the passage and <a href="/article/risks-and-opportunities-ukraines-anti-corruption-and-reform-agenda">enactment of any legal changes</a> will likely drag on for weeks and months, while freshly mobilized forces will likely require at least two months of training &mdash; meaning a significant increase in Ukrainian frontline manpower will not take place during the quarter. Domestic war fatigue in Ukraine will grow as a result, weighing on <a href="/article/what-make-zelenskys-alleged-plan-remove-ukraines-top-general">President Volodymyr Zelensky&#39;s popularity</a> and somewhat harming the country&#39;s fragile economy, but any protests will not prove impactful because they will lack broader public support.&nbsp;

Russia and Ukraine Make Homefront Adjustments for Continued War 

Peace deal negotiations between Armenia and Azerbaijan will continue, but Armenian hesitation to meet Azerbaijani demands will maintain the possibility of flare-ups. Baku and Yerevan will hold high-level contacts and exchange drafts of a potential peace treaty, and their bilateral border demarcation commission will continue to meet. The Armenian government will continue to float the controversial possibility of changing its constitution and other internal legal documents to remove references to reunification with Nagorno-Karabakh. It will likely pursue other changes to boost the government&#39;s popularity and further distance the country from the decades of post-Soviet oligarchic governance that preceded the current government, though major progress will not take place during the quarter. Armenia will also continue pursuing arms and enhanced military cooperation deals with India and various NATO countries outside the Russian-led Collective Security Treaty Organization, with which Yerevan will continue to freeze high-level cooperation, further chilling relations with Moscow. In response, Baku could <a href="/article/azerbaijan-early-presidential-election-may-portend-further-threats-armenia">conduct escalatory attacks</a> resulting in a few deaths in order to demonstrate its leverage, but a return to <a href="/article/assessing-prospect-azerbaijan-invading-armenia">large-scale hostilities</a> will remain unlikely due to Baku&#39;s confidence it can achieve its demands without another full-scale war and that military conditions will remain in its favor. &nbsp;

Armenia-Azerbaijan Peace Talks Continue, but Yerevan Will Delay Concessions

The inauguration of the revamped All-Belarusian People&#39;s Assembly will solidify integration with Russia via the Union State and Belarusian stability ahead of a 2025 presidential election. In April, Belarus will hold the first convening of the All-Belarusian People&#39;s Assembly since the extraparliamentary body received new constitutional powers in 2022. The assembly, which will consist of 1,200 pro-government individuals, is designed to consolidate President Alexander Lukashenko&#39;s power in the short and long terms by allowing him to chair the body. This will help prepare for his eventual succession process, which would allow him to leave the presidency and pass on the daily duties associated with it while still controlling the country and president through the All-Belarusian People&#39;s Assembly&#39;s powers. These powers include confirming the legitimacy of elections, removing the president, introducing martial law, appointing judges of the Constitutional and Supreme Courts and members of the Central Election Commission, and numerous other new functions. The assembly will also pass new directives reaffirming the country&#39;s <a href="/article/whats-ahead-belarus-russia-integration">pro-Russian course</a> to make sure that this policy orientation is institutionalized and goes beyond Lukashenko&#39;s personal preferences. The assembly will likely call for new measures to accelerate integration with Russia and, in the long-term, for a Belarusian government that more proactively supports the Russian war effort in Ukraine, though any adjustment in the latter is unlikely during the quarter. The enactment of these political changes will fuel brain drain as the <a href="/article/belarus-tentative-recovery-won-t-ensure-future-growth-or-kick-start-opposition">Belarusian opposition</a> calculates that political change in Belarus is highly unlikely in the short to medium term.&nbsp;

Belarus Makes Structural Changes to Cement a Pro-Russian Course 

Asia-Pacific

Key political dates for Taiwan will coincide with an intensifying U.S. presidential race to impede even minor U.S.-China cooperation avenues while fueling new bilateral economic restrictions and escalating Chinese military and trade coercion against Taiwan. The 45th anniversary of the Taiwan Relations Act on April 10 and the <a href="/article/taiwans-election-yields-four-more-years-dpp-rule-and-china-tensions">inauguration of Taiwanese President-elect</a> William Lai on May 20 may spur high-level U.S.-Taiwan legislative visits and U.S. bills expediting arms sales to Taiwan. These events are likely to trigger new Chinese coercive activities toward Taiwan, particularly if the <a href="/article/what-make-chinas-military-drills-near-taiwan">U.S. House speaker visits Taiwan</a>. Chinese reactions may include higher tariffs on Taiwanese imports, Chinese military exercises around Taiwan proper, Chinese <a href="/article/deadly-incident-sea-heightens-china-taiwan-tensions">coast guard provocations</a> around Taiwan&#39;s Kinmen or Matsu islands, or China poaching more of the few remaining countries that still extend diplomatic recognition to Taiwan. Furthermore, the intensifying U.S. election season will see bipartisan anti-China sentiment surge, and will come in tandem with a greater pace of U.S. economic restrictions on China (and Chinese trade retaliations) in response to China&#39;s moves against Taiwan. These Taiwanese and U.S. political events will impede the efficacy of <a href="/article/china-sees-risk-everywhere-its-2024-work-report">existing U.S.-China cooperation</a> avenues &mdash; e.g., China&#39;s willingness to curb fentanyl supply chains or collaborate with Washington on climate goals &mdash; and sustain lower U.S. investor confidence in China and U.S. corporate efforts to diversify operations in Asia to mitigate geopolitical risks. Chinese provocations around Taiwan remain unlikely to spur conflict or even major business disruptions, but they will keep national security concerns top of mind (above economics) in U.S. policy toward Asia. &nbsp;

Taiwan and U.S. Elections Fuel U.S.-China Economic and Military Competition

Despite an ongoing scandal, Japan&#39;s government will remain in place during the quarter, allowing Tokyo to focus on boosting military funding and expanding the U.S.-Japan-South Korea military partnership to deal with security threats from China, North Korea and Russia. An ongoing slush fund scandal has sunk approval for Prime Minister Fumio Kishida and his ruling Liberal Democratic Party, but Kishida&#39;s low personal exposure to the crisis and his deft management &mdash; especially his dissolution of key LDP factions &mdash; has kept LDP rivals at bay and prevented the political opposition from obstructing the passage of the 2024 budget. This will likely be enough to prevent the LDP from ditching Kishida prior to the party&#39;s September leadership elections. Kishida could win those elections and remain prime minister past September if he can balance LDP factions &mdash; and especially if he can keep LDP President Taro Aso on his side &mdash; with by-elections for three lower house seats April 28 serving as indicators of Kishida&#39;s prospects of victory. During the quarter, Kishida will thus persist with his plans to bolster defense spending alongside <a href="/article/how-will-japans-high-debt-levels-impact-its-increased-defense-spending">Japan&#39;s expanding military role</a> in the Western Pacific (e.g., around Taiwan) and to strengthen military partnerships with South Korea, the Philippines, Australia and the United States.&nbsp; &nbsp;

Japan's Kishida Looks Set to Weather the Political Storm

The spring fishing season risks maritime clashes between South and North Korea, which could exacerbate security and economic rifts between regional blocs centered on the United States and China, while South Korea&#39;s April legislative elections could facilitate anti-union policies, improving business sentiment while risking street clashes. The April-June fishing seasons for blue crab and yellow croaker will see North and South Korean boats fishing in waters that overlap with the disputed Northern Limit Line maritime border, while the governments in Seoul and Pyongyang will continue to pursue <a href="/article/shifting-geopolitics-prompt-south-korea-mull-reasserting-its-place-world">maximum military deterrence strategies</a> toward one another. Amid these tensions, both Koreas are likely to use their fishing vessels &mdash; and coast guard or naval escorts &mdash; to bolster their maritime claims, raising the risk of a potentially deadly clash that spurs military exercises across the land border and increasing security concerns for businesses in Seoul, just 20 miles (about 32 kilometers) from the border. It would also stoke more U.S.-South Korea-Japan and China-Russia-North Korea military exercises in nearby seas, inhibiting South Korean and Japanese <a href="/article/china-japan-and-south-korea-will-resume-trilateral-talks-diplomatic-hurdles-remain">efforts to limit economic competition</a> with China and incentivizing North Korea to increase weapon sales to Russia. This would strengthen Russian supply lines in Ukraine in return for Russian defense industrial support. In the meantime, South Korea&#39;s April 10 legislative elections will be a close race, but President Yoon Suk Yeol may be able to <a href="/article/south-korea-doctors-strike-could-play-yoons-favor-ahead-legislative-elections">boost his public support</a> due to recent doctors&#39; strikes to erode the opposition&#39;s legislative majority or even secure a conservative majority. This would strengthen Yoon&#39;s ability to curb unions, enhancing business sentiment even as it risks greater street protests and clashes between unions and the police.

Fishing Season and Elections Bring Sensitive Korean Peninsular Issues to the Fore

In Indonesia, political continuity will produce domestic and foreign policy continuity during the quarter despite accusations of election irregularities. Defense Minister Prabowo Subianto&#39;s comfortable <a href="/article/previewing-indonesias-presidential-election">Feb. 14 presidential election</a> victory means stakeholders in Indonesia, both local and foreign, will enjoy a degree of certainty, as the president-elect campaigned on a promise of continuity with outgoing President Joko &quot;Jokowi&quot; Widodo. This will include foreign policy, as evidenced by the Feb. 23 announcement that Indonesia is aiming to establish a security pact with Australia, negotiations that Subianto is personally leading as defense minister. Subianto will also take a primary role in advancing security <a href="/article/promise-and-limits-upgraded-us-indonesia-ties">ties with the United States</a> given his enduring key role in the outgoing administration. In large part, this will involve purchases of modern arms such as fighter jets and helicopters on the back of a 20% boost to defense spending for 2024. From a business perspective, signature Jokowi policies such as <a href="/article/indonesia-gambles-refined-nickel-amid-global-energy-transition">resource nationalism</a>, such as forcing nickel and other refiners to operate in Indonesia, are likely to continue under the new government. While the country&#39;s largest party, the Indonesian Democratic Party of Struggle, has launched a probe to investigate alleged irregularities in the presidential election, there is little chance that it will impede Subianto&#39;s incoming presidency or spur substantial social unrest.

Indonesia Enjoys Political Certainty 

Middle East and North Africa

Seeking to avoid a broader war, Iran will attempt to limit the activities of its allied militias in Iraq and Syria, but as the quarter and Israel&#39;s military operation in Gaza and West Bank drag on, Iranian-backed militias will likely resume attacks on U.S. forces. Since the Jan. 28 Tower 22 attack in Jordan that <a href="/article/potential-us-responses-lethal-attack-iranian-allies-jordan">killed three Americans</a>, Iranian security officials have actively tried to rein in militias in Iraq and Syria for fear the U.S. military response to the attack could provoke a regional war with the United States, and Tehran will likely continue doing so during the early weeks of the quarter. As tensions in Iraq and Syria decline amid a collapse in the number of attacks, Iran&#39;s proxies will resume some attacks against U.S. forces, particularly if talks between the Iraqi government and U.S. military over the future of the U.S. military presence in Iraq stall. Even if attacks resume, their frequency will be far below the more than 150 seen in the three months prior to the Tower 22 attack due to Iran being <a href="/article/iran-us-tensions-will-remain-high-despite-both-sides-desire-avoid-war">concerned about reescalation</a>. If Israel launches military operations in Lebanon or overt military strikes on Iranian soil, Iran&#39;s risk calculus would likely change, leading to increased attacks against the U.S. military presence in the region, though the likelihood of this remains low.&nbsp;

Iran Holds Back Its Iraq and Syria Proxies, but Attacks Will Likely Resume in Time

As Israel reoccupies Gaza, it will turn its attention to an escalating military campaign against Hezbollah in Lebanon, while Western, Arab and domestic Israeli opposition figures will grow increasingly critical of Prime Minister Benjamin Netanyahu&#39;s government and policies. With Hamas&#39; territory shrinking under sustained military assault, by the end of the quarter, Israel will likely <a href="/article/reviewing-israels-options-gazas-post-war-future">assume control of Rafah</a> along the Egyptian border. This will happen either by force or via a diplomatic deal that sees the <a href="/article/what-watch-israel-advances-rafah">withdrawal of Hamas</a>, freeing up Israeli forces to redeploy northward to face Hezbollah. There, Israeli forces will steadily escalate against the group in an attempt to force its withdrawal from the border. They will encounter entrenched Hezbollah resistance, which will calculate its responses based on its own domestic political imperative of avoiding war with Israel versus defending Lebanese territory. This confrontation will increasingly raise the risk of an Israeli incursion or invasion of southern Lebanon. The West and Arab states with normalized relations with Israel will criticize this anti-Hezbollah campaign and work toward a diplomatic deal that prevents full-scale war. Still, they will reserve their most targeted and sharp criticism for Israel&#39;s reoccupation of Gaza and the Israeli government&#39;s reluctance to entertain policy proposals that might bring the Palestinian Authority back to power there. This will overlap with the reemergence of a strong anti-Netanyahu opposition movement inside Israel as the Gaza war transitions to an occupation. At the same time, divisions within the Israeli government over the future of draft exemptions for ultra-Orthodox Jews will also grow, trends that will end the wartime unity politics of the Knesset and portend substantial turmoil in the government.&nbsp;

As Gaza's War Subsides, Israel Turns Northward -- and Inward 

Egypt&#39;s expanded IMF loan and recent reforms will likely improve the country&#39;s balance-of-payments crisis and increase investor confidence, making Gulf states more likely to invest in Egypt&#39;s tourism sector. Egypt&#39;s interest rate hikes and the decision to allow the flotation of the Egyptian pound will likely increase inflation in the short term, especially on imported goods. Furthermore, <a href="/article/how-will-gaza-war-impact-egypt-jordan-and-lebanons-economies">Egypt&#39;s expanded IMF loan</a> will signal Cairo&#39;s commitment to economic reforms and responsible macroeconomic policies to investors. The move to a floating currency weakened the pound and reduced Egyptians&#39; purchasing power, exacerbating the cost-of-living crisis. But Egypt will be better positioned to improve its balance of payments with the influx of funds and increase its ability to import more goods. With momentum from a $35 billion Emirati investment deal to develop Ras El Hekma signed in February, Cairo will likely seek a similar investment deal from Qatari and Saudi sovereign funds to develop Ras Gamila as a key tourist destination. If Cairo finalizes this deal, the floating pound will likely strengthen. Despite dissatisfaction with the domestic economic impact of a weakened pound, the move to a floating currency and decreased purchasing power are unlikely to cause widespread social unrest due to Cairo&#39;s severe crackdown on protests. Furthermore, Egyptians had anticipated <a href="/article/what-another-el-sisi-term-would-mean-egypt">some devaluation</a> of the currency after Cairo had previously devalued it three times since February 2022.&nbsp;

Egyptian IMF Deal, Economic Reforms Will Increase Gulf Investor Confidence

Turkey&#39;s municipal elections will show whether the opposition can recover from its electoral defeat in 2023, while helping define the ruling Justice and Development Party&#39;s (AKP) political strategy to secure power beyond the end of President Recep Tayyip Erdogan&#39;s term in 2028. In <a href="/article/whats-stake-turkeys-municipal-elections">Turkey&#39;s two largest cities</a>, Istanbul and Ankara, the AKP has set its sights on mayoral posts it lost in 2019 as the Republican People&#39;s Party (CHP) surged in popularity. There, mayors Ekrem Imamoglu in Istanbul and Mansur Yavas in Ankara are widely seen as potential unifiers of the fractured opposition alliance and direct challengers to AKP control of the presidency. Should the AKP manage to capture one or both of these seats, it will further scramble the opposition alliance. This would open the door for the AKP to peel away opposition members of parliament and parties looking to distance themselves from the ineffective CHP to pass another constitutional reform effort in parliament, where they still lack the three-fifths majority needed to do so. But should the AKP fail to unseat Imamoglu and Yavas, it will pressure the AKP to find other means to lure opposition parties to its policies, such as a return to <a href="/article/turkey-wavers-under-weight-its-debt-load">economic populism</a> and/or more nationalist and hard-line policies at home and abroad against groups like the Kurds.&nbsp;

Turkey's AKP Eyes Key Mayoral Races

Europe

Policymakers and political parties will increasingly call for a more interventionist policy direction from the bloc ahead of EU elections in June, heralding the prioritization of industrial and defense policies over the green agenda after the vote. The European Commission will seek to finalize outstanding pieces of legislation in areas such as corporate sustainability, industrial policy, cybersecurity and the environment ahead of the June elections for the European Parliament. Final agreements on controversial initiatives such as anti-green washing regulations or reform proposals to <a href="/article/implications-eus-pharmaceutical-reform">EU pharmaceutical legislation</a> are unlikely to be achieved by the European Parliament&#39;s last plenary session on April 22-25. In the run-up to the election, technocrats in Brussels and political parties across the ideological spectrum will increase their calls for more ambitious industrial strategies for the European Union to meet its <a href="/article/what-make-eus-new-green-industrial-strategy">climate</a>, <a href="/article/goals-and-limits-eus-new-defense-industrial-strategy">defense</a> and <a href="/article/eu-advances-its-economic-security-strategy">strategic autonomy goals</a> while preserving economic competitiveness, indicating a likely more protectionist and interventionist policy direction for the bloc after the vote. Throughout the quarter, mainstream political parties will also seek to contrast themselves with <a href="/article/europe-far-right-parties-are-again-rise">rising right-wing parties</a> by promising to balance climate action with more support for traditional sectors like industry and farming, while Brussels will set caps on Ukrainian agricultural imports starting from June in response to <a href="/article/growing-farmer-protests-add-eus-political-woes">ongoing farmers protests</a>. After the elections, EU member states will negotiate top appointments, including for European commissioners, the European Council president and the EU foreign policy chief, but confirmation by the European Parliament on these will not take place until the following quarter. &nbsp;

Brussels Sets the Stage for Future Policy Directions Ahead of EU Elections

Political campaigning ahead of EU elections will drive a conservative turn in France and amplify intracoalition tensions in Germany and Italy, though a government crisis remains unlikely in either country. In France, the government will seek to win conservative and rural votes away from right-wing parties by pursuing <a href="/article/france-rejection-governments-immigration-bill-risks-triggering-another-political-crisis">stricter immigration policies</a>, such as a proposed suspension of birthright citizenship in the French department of Mayotte, and implementing measures aimed at appeasing protesting farmers by cutting costs and red tape. Meanwhile, <a href="/article/look-eus-revised-fiscal-rules">significant budget cuts</a> amid slower economic growth will take resources away from energy transition subsidies for home renovations, electric vehicles and industry decarbonization. In Germany, the <a href="/article/more-cracks-appear-germanys-ruling-coalition">fractious coalition government</a> will struggle to implement legislation as political calculations exacerbate internal divisions. The Free Democrats will increasingly harden its position within the coalition in a bid to reverse falling approval ratings, leading to potential delays to the approval of measures aimed at decarbonizing the economy, boosting growth and supporting German companies, as well as potential new policy shifts at the EU level, for instance on new rules for air quality. Still, such divisions will not lead to a government collapse. In Italy, electoral calculations may <a href="/article/reviewing-italys-first-year-under-meloni-anti-establishment-pragmatic">reduce government cohesion</a> during the quarter, with the struggling Lega party taking a tougher line on issues such as migration, law and order, and EU relations. A very poor electoral outcome for the party in June may lead to an internal leadership challenge, potentially destabilizing the ruling majority but not to the extent of provoking the dissolution of the coalition. In Belgium, national elections will see nationalist and separatist parties gain influence. At the federal level, a broad-based centrist coalition with a similar policy agenda to the previous government is likely to take power following lengthy negotiations, while a likely victory by secessionist forces in the Flanders may lead to an independence push for the region.

Politics Take Over Policy Across Europe

In the United Kingdom, local elections will provide an electoral test for the government ahead of a nationwide vote later in the year, possibly increasing political turbulence within the ruling Conservative Party and policy uncertainty. Local elections May 2 in England will provide an early indicator of voting trends ahead of <a href="/article/previewing-europes-2024-national-elections">general elections</a> widely expected in the fall, testing the success of preelectoral tax cuts unveiled by the government in March. <a href="/article/uk-sunaks-rwanda-migration-bill-survives-its-first-vote-divisions-remain">Internal disputes</a> among the Conservatives will continue throughout the quarter, especially if the Tories perform poorly in the local elections, adding to political and policy uncertainty in the country. A particularly bad electoral performance would further dent confidence in Prime Minister Rishi Sunak&#39;s leadership, yet a leadership challenge remains unlikely so close to the vote. The British government will also continue implementing the stricter migration policies it has introduced in the previous months, including raising the minimum salary threshold for skilled workers and their partners&#39; visas, potentially exacerbating <a href="/article/uks-post-brexit-economic-struggles-look-set-linger">shortages in certain sectors</a> including health and social care. A recent agreement between London and the Democratic Unionist Party to restore power-sharing institutions in Northern Ireland will not lead to any concrete change to post-Brexit arrangements in the region, which means U.K.-EU relations will remain positive. Still, electoral campaigning in both the European Union and the United Kingdom will limit space for further significant cooperation during the quarter.&nbsp;

Local Votes Cast Shadow on the Outlook for the U.K. National Election

Poland will start receiving frozen EU funds despite Warsaw&#39;s struggles to implement reforms aimed at increasing the independence of the country&#39;s judiciary. Poland will start receiving the first tranches of previously <a href="/article/eu-s-top-court-upholds-linking-funding-respecting-rule-law">frozen EU funds</a> in the quarter after <a href="/article/parliamentary-elections-may-move-poland-closer-brussels">the new government</a> ended a yearslong rule-of-law dispute with the European Commission, which will also likely close the rule-of-law breaching procedure against the previous Law and Justice administration. Still, the government will continue to struggle to advance promised reforms aimed at increasing the independence of the judiciary amid resistance from Law and Justice ally and Polish President Andrzej Duda&#39;s veto powers, opposition-led demonstrations and legal challenges in courts dominated by Law and Justice-appointed judges. <a href="/article/rough-power-transition-thrusts-poland-political-crisis">Domestic political tensions</a> will continue to affect policy implementation and undermine the stability and functioning of key institutions, thus increasing uncertainty and negatively affecting market sentiment despite improved relations with the European Union. Amid such tensions, the government will remain accommodative toward Polish farmers&#39; demands, seeking exemptions from EU environmental legislation and trade liberalization with Ukraine in order to maintain its support through the quarter in light of local elections April 7 and EU elections in June despite the tensions this could cause with Brussels and Ukraine.

Poland to Receive EU Funds as Warsaw Navigates Domestic Challenges

South Asia

India&#39;s general election will likely result in political continuity, allowing the government to proceed with the secularization of social laws, labor code reforms and increasing regional connectivity, even if social unrest is likely. Opinion polls suggest the ruling Bharatiya Janata Party will <a href="/article/india-ram-temples-consecration-set-boost-modis-re-election-bid">secure a simple majority</a> in the lower house of India&#39;s parliament in the general elections between April 19 and June 1. If it does not, the BJP will likely rely on allies within the National Democratic Alliance to remain in power. Following the election, the government will likely prompt BJP-led states like Assam, Gujarat, Madhya Pradesh and Rajasthan to implement the Uniform Civil Code, a series of laws that govern marriage, relationships and inheritance that replace religious personal laws. While the UCC may combat discrimination against women by prohibiting underage marriages and ensuring inheritance equity, it could generate a backlash from religious minorities and tribal communities who perceive the UCC as an effort to <a href="/article/ahead-elections-india-enacts-controversial-citizenship-law">impose Hindu-centric laws</a>. A BJP win will also likely result in the implementation of labor codes (already passed by parliament in 2020) addressing termination or dismissal criteria, social security, occupational safety, and health and working conditions. While some of these regulations aim to enhance working conditions and boost investor confidence, they could trigger protests by trade unions. Finally, a BJP victory will likely continue to enhance trade, connectivity and investment in South Asia, such as via negotiations due in June for a <a href="/article/dust-settles-home-bangladesh-turns-its-attention-foreign-policy">Comprehensive Economic Partnership Agreement</a> with Bangladesh. Meanwhile, India and Sri Lanka sealed a deal March 1 to collaborate on advancing a hybrid renewable energy system. Due to the absence of a legal framework and pending discussions on funding sources, however, both will have to continue discussions, possibly into the second quarter.

India Holds National Elections

Pakistan&#39;s government will prioritize negotiating a deal with the International Monetary Fund and suppressing domestic dissent, but the coalition&#39;s internal divisions and insufficient popular support will impede reform efforts amid deteriorating security conditions. The <a href="/article/challenges-facing-pakistans-new-government">new coalition government</a> will prioritize negotiations for a fresh IMF program, potentially aiming for a new loan exceeding $6 billion. With Shehbaz Sharif&#39;s return as prime minister, Pakistan is likely to secure IMF assistance given his past administration&#39;s commitment to reforms. But IMF conditions will likely require Islamabad to implement unpopular policies &mdash; such as ending energy subsidies, increasing taxes, and raising electricity and fuel prices &mdash; risking public discontent, something the coalition&#39;s lack of popularity will intensify. Social unrest is likely to persist with allegations of <a href="/article/previewing-pakistans-parliamentary-elections">electoral manipulation</a>, potentially dampening investor confidence, risking Pakistan&#39;s access to funding from bilateral sources and elevating the risk of default. Despite their shared goals of economic recovery and countering former Prime Minister Imran Khan&#39;s influence, political and personal differences among the coalition members could impede reform efforts, threatening to destabilize the government. Authorities would likely crack down on protests, with the military likely to maintain its political role amid <a href="/article/no-clear-winner-pakistans-election-yields-more-political-uncertainty">persistent instability</a>. In the short term, the military will strive to preserve coalition unity for fear that its collapse could pave the way for Khan&#39;s return.

Pakistan Negotiates a New IMF Program

Sri Lanka will focus on debt restructuring negotiations with lenders and external private creditors, while deliberations on the Online Safety Act will potentially spark protests. Sri Lanka will likely prioritize finalizing agreements with official and private creditors, as emphasized by <a href="/article/whats-next-sri-lanka-after-its-failed-imf-review">the IMF&#39;s call</a> for the timely implementation of program commitments. The government has indicated its intention to establish a debt restructuring framework by spring and to conclude agreements with all major creditors, including bondholders, by May. It may struggle to meet this goal due to disagreements over legal conditions and the need to secure consensus among all creditors. Failure to reach an agreement would raise <a href="/article/sri-lankas-mounting-economic-crisis-could-give-way-political-reckoning">the risk of a default</a> as Sri Lanka became unable to make scheduled interest payments on its debt. As a part of its IMF program, Colombo is also likely to make progress in the privatization of state-owned enterprises such as SriLankan Airlines. Meanwhile, the government will contemplate amendments to the controversial Online Safety Act, which has faced national and international criticism for its perceived infringement on freedom of expression. While the government might amend the act under such pressure, the extent of any changes remains uncertain, leaving the risk of <a href="https://threatlens.stratfor.com/content/sri-lanka-s-security-outlook-year-after-2022-protests" data-content-type="lens_analysis">low-level social unrest</a> and a subsequent crackdown in place.

Sri Lanka Prioritizes Debt Restructuring

With the waning of socio-political turbulence, Bangladesh will <a href="/article/dust-settles-home-bangladesh-turns-its-attention-foreign-policy">prioritize its foreign policy goals</a> by enhancing economic and diplomatic relations with the United States, India and Japan aimed at facilitating investment and infrastructure agreements. Following months of <a href="/article/previewing-bangladeshs-upcoming-general-election">political unrest</a> in late 2023 and early 2024, Bangladesh is now experiencing relative calm, potentially reducing U.S. scrutiny and sanctions risks and allowing Bangladesh to focus on attracting foreign investment. These include efforts to enhance transparency in the banking sector to align with U.S. and foreign investor interest, and will likely be a central topic of discussion during diplomatic visits. Strong relations with Bangladesh remain crucial for the United States amid a geopolitical context of growing Chinese influence and escalating conflicts in neighboring Myanmar. Despite these improving ties, any escalation in violence or notable government crackdown could prompt heightened attention from the United States and potentially trigger <a href="/article/bangladesh-braces-another-turbulent-election">targeted human rights sanctions</a>. Meanwhile, Japan and Bangladesh will strengthen their bilateral ties through an Economic Partnership Agreement aimed at removing trade and investment barriers. Negotiations for the EPA were initiated March 12, with talks possibly extending into April-June and focusing on areas like apparel tariffs and reductions in Dhaka&#39;s tariffs on imported steel and automobiles. Furthermore, the selection of contractors for the construction of the Matarbari Deep Sea Port, with support from the Japan International Cooperation Agency, is expected to occur in the coming months under the supervision of Bangladesh&#39;s Chittagong Port Authority. And short-term advances in defense cooperation under Japan&#39;s Official Security Assistance are also likely, potentially involving military aid to bolster Bangladesh&#39;s maritime defense capabilities. &nbsp;

Bangladesh Shifts Its Focus to Foreign Policy

Ahead of elections in June, Mexico&#39;s government will seek to pass a slate of constitutional reforms guaranteeing minimum wage hikes above inflation and increased benefits for pensioners, while water scarcity will continue to drive unrest and push businesses farther south. Ahead of presidential and legislative elections June 2, the Mexican government will work to pass a package of 18 constitutional reforms to increase pension benefits for retired Mexicans, elevate the minimum wage past inflation, decrease the size of both houses of Congress, and allow for the popular election of Supreme Court judges, among others. President Andres Manuel Lopez Obrador introduced the reforms in early February mainly to steer the national conversation before the election and win votes. The opposition may approve some of the reforms, such as increased wages and pension benefits, for fear of the electoral backlash if they reject them. But it will firmly oppose institutional reforms, such as restructuring the Supreme Court. While opinion polls suggest that the left-wing ruling party candidate will win the election by a comfortable margin, if the result is closer than anticipated, it could lead to challenges to the final vote count and protests by the losing side. Such a scenario could create governance challenges immediately after the election. Meanwhile, <a href="/article/how-el-nino-will-impact-latin-america-2024">worsening water scarcity</a> in central and northwestern Mexico will continue to drive social unrest in Mexico City, where the government has recently implemented water restrictions, at least until the onset of the rainy season in May. The government will seek to limit construction and development in areas where water resources are strained, likely pushing many international businesses seeking to <a href="/article/how-will-changing-global-conditions-impact-latin-americas-largest-economies">establish supply chains</a> in Mexico farther south, to central or southern regions in the country, like the Yucatan Peninsula.&nbsp;

Mexico City Forwards Controversial Reforms Ahead of National Elections

Argentina&#39;s government will continue to unilaterally slash state spending, and while inflation is likely to fall and the primary budget surplus to grow, the ensuing decline of domestic consumption will severely slow economic activity and keep a high risk of social unrest. In April, the government will implement a new Basic Energy Basket scheme to determine electricity and gas subsidies for consumers based on geographical location, family size and income level. The International Monetary Fund expects the new system to <a href="/article/gauging-outlook-energy-reforms-argentina">reduce energy subsidies</a> by 0.5% of gross domestic product in 2024, aiding the government in its goal of attaining a fiscal surplus of 2% of GDP for the year, but making energy consumption more expensive for Argentines in the process. After Congress blocked his flagship reforms package in February, <a href="/article/argentina-has-elected-libertarian-president-what-now">President Javier Milei&#39;s</a> Freedom Advances party will likely seek to shore up a coalition with the right-wing Republican Proposal party. This arrangement will be fragile given opposition to Milei among some members of Republican Proposal leadership. Furthermore, even if two parties decide to form an alliance, their combined representatives in Congress will still fall well below what is needed to approve laws. After months of growing tension between the federal government and provincial leaders, Milei proposed a tacit truce to governors, offering federal tax transfers in exchange for political support for his reforms. If Milei&#39;s rapprochement with the governors succeeds, the government may reintroduce some legislation <a href="/article/argentina-challenges-and-benefits-facing-mileis-deregulation-push">targeting fiscal cuts</a> and labor and pension reforms.&nbsp; &nbsp;

Argentina's Government Pushes Ahead With Austerity Plans

Brazil&#39;s Congress will debate complementary laws regulating tax reform and a variety of environmental laws to hasten the green transition, while President Luiz Inacio Lula da Silva will advocate for the Global South in <a href="/article/internal-divisions-ensure-brics-expansion-will-remain-slow">multilateral forums</a>. The main priority for Brazil&#39;s Congress during the quarter will be passing complementary laws surrounding <a href="/article/reassessing-brazils-economic-outlook">tax reform</a> that passed at the end of 2023. This will include choosing a basic basket of goods and services that will be tax-exempt and those that will face higher taxes, and balancing federal tax collection between states and municipalities. While the government will likely decide these parameters during the quarter, the new tax system will not go into effect until at least 2026. In addition, the government has several priority items pending debate in Congress, including legislation that would regulate a carbon credit market in Brazil; offshore wind regulations; and a law to promote research, development and the use of biofuels. Lula will also use Brazil&#39;s rotating presidency of the G20 to promote reforms to global governance institutions, pushing for greater representation of Global South countries at the U.N. Security Council and in multilateral financial institutions, and for establishing sustainable funding mechanisms for the green transition. While Lula&#39;s efforts will likely garner support in the Global South, his aspirations will ultimately fall flat, as the United Nations is unlikely to pursue reforms amid global conflicts and wealthy countries will be hesitant to cede authority in multilateral funding institutions.&nbsp;

Brazil to Regulate Tax Reform, Advance Green Policies

The Venezuelan government&#39;s continued repression of the opposition and failure to reinstate its presidential candidate will probably result in a snapback of U.S. oil and gas sanctions, which may push President Nicolas Maduro to manufacture a security crisis with Guyana to rally support ahead of elections. As July 28 elections approach, the government will continue to <a href="/article/venezuela-opposition-candidates-disqualification-dims-hopes-free-and-fair-elections">repress the domestic opposition</a>. An electoral ban on the opposition&#39;s leading candidate, Maria Corina Machado, will probably push the United States to <a href="/article/venezuela-us-puts-politics-aside-unlock-more-oil-exports">reimpose oil and gas sanctions</a> on Venezuela in mid-April. If this happens, the loss of oil revenues will likely deepen Venezuela&#39;s economic crisis, increasing emigration. This may push Maduro to rally his supporters via ratcheting up rhetoric against Guyana over the <a href="/article/venezuelan-voters-back-referendum-over-region-disputed-guyana">ongoing territorial land dispute</a> in the Essequibo region. This may take the form of harassing international oil exploration vessels off Guyana&#39;s shores, amassing military assets directly on the border or even incursions into the disputed territory. While a ground invasion is unlikely, Venezuelan intimidation would draw international condemnation. Guyana will meanwhile attempt to de-escalate by continuing talks mediated by Latin American partners.&nbsp;

Oil Sanctions Loom Over Venezuela

Sub-Saharan Africa

South Africa&#39;s May election will be the most competitive in the country in 30 years, testing the dominance of the ruling African National Congress, increasing political uncertainty amid a potential first-ever minority or coalition government, and risking a broader political crisis. Polls indicate the ANC will win between 39% and 48% of votes, down from 57.5% it won in the previous election. In the likely scenario where the ANC receives less than 50% of votes, it will be compelled to either stay in power as part of a coalition or as a minority government. While the party could still reelect President Cyril Ramaphosa with support from a small number of opposition politicians, no opposition party is an obvious choice for alignment with the ANC. This means that Ramaphosa is more likely to form case-by-case alliances to pass legislation, which would increase policy uncertainty amid volatile majorities. In a less likely scenario, the ANC could build a formal coalition with a major opposition party, which would force the ANC to make policy concessions ranging from more aggressive land reform to reduced social services. South Africa could also face a broader political crisis if a political deal fails to come to fruition and support from smaller parties proves insufficient to pass legislation. In the least likely scenario, the ANC would win more than 50% of votes and maintain its outright parliamentary majority. Still, it would likely struggle&nbsp;to <a href="/article/no-end-sight-south-africas-economic-stagnation">address unemployment</a>, inequality and <a href="/article/south-africa-bails-out-eskom-again-blackouts-remain-likely">electricity reform</a> given factionalization and <a href="/article/south-africa-s-anc-will-likely-shield-ramaphosa-impeachment-what-cost">corruption</a> within the party.&nbsp; &nbsp;

South Africa's ANC Likely Loses Its Outright Electoral Majority 

Economic Community of West African States&#39; authority will continue to erode amid the withdrawal of Mali, Niger and Burkina Faso from the bloc, likely dampening investor confidence across West Africa and potentially encouraging violent crackdowns in Senegal. Tensions will persist between Ecowas and Mali, Niger and Burkina Faso over the trio&#39;s <a href="/article/what-mali-niger-and-burkina-fasos-exit-ecowas-means-west-africa">announced departures from the regional bloc</a> as the three countries&#39; juntas reinforce trilateral cooperation. Mali, Niger and Burkina Faso could look to unilaterally fast-track their exit prior to the official January 2025 departure date, but their continued membership of the West African Monetary and Economic Union means that the economic impact of doing so would likely be limited. Ecowas will take a more lenient approach to respect for democratic norms among member states in hopes of securing Mali, Niger and Burkina Faso&#39;s return, but this will make it even harder for Ecowas to encourage compliance with democratic norms, and could embolden more West African leaders to subvert democratic processes. This comes as Senegal&#39;s new president takes office April 2 amid a <a href="/article/senegal-election-delay-fuels-fears-democratic-backsliding">tense domestic political climate</a>, and could encourage a harsh crackdown on protesters there. The continued erosion of democratic norms will likely weaken investor confidence across the region given the heightened political uncertainty this will bring. These economic risks will be heightened in Senegal given the possibility of a contested election amid opposition mistrust of the incumbent party, which could trigger violent protests that could devolve into a protracted political crisis.&nbsp;

ECOWAS Faces a Continued Erosion of Authority Amid Sahelian Junta Departures 

Sustained internal ethnic insurgencies will hinder Ethiopia&#39;s economic recovery from the Tigray war, and a subsequent debt crisis could compel the Ethiopian government to backtrack from a controversial deal with Somalia&#39;s breakaway region of Somaliland. Ethiopia will likely experience sustained ethnic insurgencies in both <a href="/article/unrest-amhara-threatens-destabilize-northern-ethiopias-tenuous-peace">Amhara</a> and Oromia despite efforts by Prime Minister Abiy Ahmed to pacify both regions. While the Paris Club&#39;s extension of a standstill agreement on Ethiopian debt beyond March 31 showcases creditors&#39; flexibility, repeated high-profile human rights violations in Amhara and Oromia could see bilateral creditors push back against further such extensions, especially if no support package is agreed on with the International Monetary Fund over the quarter. Ethiopia&#39;s repeated failure to secure an IMF deal would pave the way for a <a href="/article/missed-coupon-payment-fuels-fears-ethiopian-default">debt-crisis in the medium term</a>, further destabilizing the country. These challenges could prompt Abiy to scrap his controversial <a href="/article/drivers-and-risks-ethiopias-historic-pact-somaliland">maritime deal with Somaliland</a>, which heightened tensions with Somalia, Egypt, and Eritrea.&nbsp;In the absence of a U-turn from Abiy regarding the Somaliland deal, tensions between Ethiopia and Somalia will persist. Weaker bilateral counterterrorism cooperation will raise the prospect of accidental military clashes along the two countries&#39; undemarcated border, which could result in sporadic skirmishes and raise the prospect of a broader escalation of tensions in the region.

Sustained Insurgencies Limit Ethiopia's Economic Recovery

Intense fighting is likely to persist in the eastern Democratic Republic of the Congo, in turn heightening the likelihood of a severe military escalation between Congo and Rwanda that could cause cracks within Congolese President Felix Tshisekedi&#39;s coalition. Fighting between pro-government Congolese forces and M23 rebels will focus on the regional capital of Goma, which the rebels will likely look to tighten their siege on with the goal of compelling <a href="/article/congo-president-tshisekedi-looks-secure-second-term">Congolese President Felix Tshisekedi&#39;s</a> government to engage in peace talks. The deployment of 7,000 Southern African Development Community troops to eastern Congo, the bulk of whom will arrive during the quarter, will buttress pro-government forces. Given that SADC troops could achieve tactical successes against the M23, Tshisekedi is unlikely to engage in peace talks with the rebel group this quarter. The continuation of fighting will extend <a href="/article/rwandas-role-congo-s-forever-war">severe tensions between Congo and Rwanda</a>, which is widely seen as backing M23, giving rise to possible skirmishes on the border separating the two countries. Should the Congolese public deem the Tshisekedi government&#39;s response to a high-profile incident with Rwanda insufficient, anti-government protests in Kinshasa could ensue, prompting some Tshisekedi allies to exit the coalition government. Tshisekedi&#39;s fears for his <a href="/article/assessing-risk-future-african-coups-part-1-sahel-and-central-africa">hold on power</a> raise the prospect that his government would strongly retaliate against Rwanda, elevating the risk of a major military escalation between the two sides.

2024 SECOND-QUARTER FORECAST

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