On November 5, the US presidential election and legislative elections will be held. According to polls, current President Joe Biden and former President Donald Trump will face each other again for the presidency, just as they did four years ago, this time in a completely different environment and with new opposition. On the one hand, unconditional support for Israel, inflation, immigration and his health put the Democratic president’s re-election in jeopardy. On the other hand, the Republican president faces several legal actions against him and the risk of being disqualified.
Some analysts expect the economy to be a catalyst for the incumbent president’s victory, but others warn that a slowdown is likely. In this uncertain environment, how will the economy play into voters’ decisions in the 2024 presidential election?
According to data provided by the United States Department of Economic Analysis (BEA), the US economy is projected to grow by 3.1% in 2023. A recently released report notes that “the growth was driven by an increase in the number of Americans earning and spending more” and that “the economy added 2.7 million jobs last year.”
According to Edgar Pulido, director of Ladam’s offices in Colombia in the United States, a general assessment of the economy at this time, indicators show that the economy is in a solid state based on the following indicators:
1. Employment rate. 3.8%
2. Inflation rate is 3.2% annually.
With the rise in interest rates, it was expected that the economy would have entered a recession, however, there was no recession and the landing was entirely soft.
Despite the current election environment, the economic outlook remains positive throughout the year. By the end of 2023, interest rates are expected to continue to decline, which will help generate more economic activity and continue to rise. And despite external factors that may affect; Like a war in Europe or a war conflict in the Middle East, this could harm the energy crisis and in a hypothetical scenario could recreate the blow to return to inflation.
On the other hand, about Risks or uncertainties that negatively affect the economyFrom the US this yearElection year, specific circumstances such as financial difficulties for banks that have provided loans to the office and commercial property sector as post-pandemic individuals have not fully returned to work in person. However, for now, the rest of the real estate sector is seeing price increases and sales at the same level or strong with varying growth with the Southeast continuing to lead the way in real estate growth.
Another specific situation of risk or uncertainty is in the technology sector, as the United States has always been at the forefront of the production and development of cutting-edge technology; While the production of microchips lagged in the past year, it is fundamental to the economy to manufacture or access microchips today because there are so many products that require microchips. President Biden took note of this situation and approved budgets to restart the manufacture of microchips in the United States. Recently they approved an $8.5 billion Intel plan to revive the microchip industry in the United States.
For those who are most up-to-date on the news going on in this election year, the Investment, Migration and Business Conferences in the United States will be held on Thursday, May 30 in El Nogal, Bogotá at the Club El Nogal. in days; First session at 8:30 am and second session at 6:30 pm.
On the other hand, when asking Pulido from Ladam in the United States, do you believe that the outcome of the presidential election could have a significant impact on perceptions of stability and security for foreign investments in the United States? US elections have historically always had some impact on the economy, he said, because if Republicans, who are always pro-market, win, it will have a slightly positive impact on the economy. However, the economy of the United States does not depend one hundred percent on the people in the White House, but rather on the possibilities of development in new sectors of the economy. In this case, the next potential growth sector in the US economy could come from the artificial intelligence side, where the US is leading the way in the production of this technology.
Another sector that could be affected by the elections is the energy sector, as the United States is a leader in all forms of energy production and supports the growth of the electric vehicle industry. Political parties differ slightly on this point, and depending on who the next president is, it will be the impetus for these new energy production methods.
When asked if there are specific aspects of the US economy that are particularly attractive or challenging for Latin American investors in the current environment?
He replied that a stable economy prevails with a non-convertible currency as the world’s ruling currency continues to be the dollar, which helps attract capital from all countries, not just Latin America. Also, the legal protection it provides in the US gives any investor peace of mind to carry out their activities.
One of the most challenging issues for foreign investors is likely to be the immigration issue, with the party switching in the White House; As changes may be made to the immigration system in the United States, that may affect it. However, capital is always welcome and the possibility of obtaining a visa for investors with capital does not change.
For the real estate sector, expectations will continue to be positive in the election environment as the outlook for this year will provide a major boost to the real estate sector as interest rates are clearly reduced. And, second, the national and international demand for real estate in the United States continues to be a huge draw for all types of investors. Finally, taking into account that there is a huge housing shortage, the construction of new houses will be one of the priorities of the next administration.
Therefore, according to analysts on investments in the United States, it is a matter of seeing how the economy develops in the coming months, because in their opinion, “it will definitely have a direct impact” on the election results.
