Country Risk Month Ahead: October 2025

Japan’s Liberal Democratic Party leadership election

Japan’s ruling Liberal Democratic Party (LDP) will hold a leadership election on Oct. 4, followed by the selection of a new prime minister to replace Shigeru Ishiba, who announced his resignation on Sept. 7. Five MPs, including frontrunners Sanae Takaichi and Shinjiro Koizumi, have announced their candidacies. A candidate needs a majority of LDP votes to win; otherwise, the top two candidates will face a run-off.

As the LDP currently leads a minority government—requiring opposition support to confirm the new prime minister and pass laws—the outcome of the leadership election will significantly shape the process of coalition-building and Japan’s policy direction under the new government. Koizumi has indicated that he would seek policy continuity with the outgoing Ishiba government, while soliciting cooperation from centrist opposition parties like the Democratic Party for the People (DPP). In contrast, Takaichi has expressed support for returning to the expansive fiscal and loose monetary policies of former prime minister Shinzo Abe. Takaichi would be more likely to align the LDP with new parties like Sanseito, increasing the likelihood of Japan tightening immigration policies and revisiting value-added tax reduction proposals.

While a new prime minister typically calls a snap election within one or two months of taking office, the new leader is likely to seek to maintain a minority government until public support rises—recent polls show LDP approval ratings at historically low levels of 30-35%. Government instability risks will likely persist beyond the three-month outlook due to the minority government’s reliance on opposition backing. 

The Netherlands’ early general election

The Netherlands will hold an early general election on Oct. 29. Non-aligned Prime Minister Dick Schoof’s government collapsed in June 2025 after the far-right Party for Freedom (Partij voor de Vrijheid: PVV) withdrew from a four-party coalition with the People’s Party for Freedom and Democracy (Volkspartij voor Vrijheid en Democratie: VVD), the New Social Contract (Nieuw Sociaal Contract: NSC) and the Farmer-Citizen Movement (BoerBurgerBeweging: BBB).

Following the NSC’s subsequent exit from the interim cabinet, Schoof’s caretaker administration holds only 32 of the 150 parliamentary seats, requiring difficult collaboration with opposition parties to advance legislation until a new government is formed. This process usually takes at least several months, making the inauguration of a new administration unlikely before early 2026.

In the interim, the initiation of new policy initiatives is likely to be very limited and will probably lie primarily with parliament instead of the caretaker government. Given the specifics of the Dutch electoral system, at least 15 parties are likely to enter the next parliament, making agreement on another multi-party coalition necessary to achieve a parliamentary majority for the next term.

Since Schoof has stated that he will not lead the next government, there will be a change of prime minister, while the configuration of the political parties participating in the next coalition is also highly likely to differ, with polls from September 2025 indicating increased support for current opposition parties. 

Bolivia’s run-off presidential election

The two leading presidential candidates from Bolivia’s August general election—centrist Rodrigo Paz and right-wing Jorge Quiroga—will compete in the Oct. 19 run-off election. The new government will take power on Nov. 9.

Both Paz and Quiroga are proposing structural measures to address Bolivia’s economic instability, including currency devaluation and reduced fuel subsidies, alongside incentives for investment in key sectors including natural gas, agriculture, mining and tourism. Paz has also focused his election campaign heavily on anti-corruption and austerity measures, and Quiroga on strengthening the financial system to boost investor confidence, reducing taxes and progressing potential privatizations.

No party has won a majority in the lower house or Senate, meaning that the new government will need to seek cross-party consensus to advance its policy agenda under either run-off outcome. Most parties are likely to support the proposed structural economic reforms, at least during the first year. The new government will need to secure some support from among Bolivia’s highly mobilized social and labor groups to mitigate the ongoing risk of protests over fuel and food shortages and rising inflation, especially as many of the proposed economic policies would likely produce an initial increase in consumer costs.

Argentina’s midterm legislative elections

Argentina will hold national midterm elections on Oct. 26 to renew half of the Lower Chamber and one-third of the Senate. The elected legislators will take office on Dec. 10. President Javier Milei’s Advance Freedom (La Libertad Avanza [LLA]) party is looking to increase its slim representation in Congress (38 of 257 seats in the Lower Chamber and seven of 72 seats in the Senate) to be able to pass his policy agenda for the remainder of his administrative term until 2027, including wider labor and tax reforms, privatizations of state-owned companies and cutting public jobs and the sizes of government agencies.

The latest polls indicate 39% voter support for LLA, followed by the opposition Peronist party at 35%. If Milei’s LLA fails to win in the midterm elections, this is likely to increase hurdles for his austerity agenda and zero-deficit policy in the one-year outlook, with the opposition likely pushing for bills to increase government spending for social programs and public works.

Similarly, Milei not strengthening his party’s position in Congress is also likely to delay and dilute planned reforms for the labor market and tax cuts that need fiscal space and backing from Congress to be implemented. Political developments until the October elections are likely to lead to high volatility in the peso-US dollar official exchange rate. 

Côte d’Ivoire’s presidential election

Alassane Ouattara is a strong favorite to win a fourth term, particularly after the exclusion of main rival Tidjane Thiam, leader and intended presidential candidate of the main opposition Democratic Party of Côte d’Ivoire (PDCI). Thiam was originally removed from the voter list in April for not having renounced his French nationality when he joined the electoral register. Thiam’s exclusion was ratified on Sept. 9 when the Constitutional Council confirmed it had approved only five out of 60 applications.

None of the four rivals to Ouattara, including former president Laurent Gbagbo’s ex-wife Simone Ehivet Gbagbo, has the national following, political organization or financial resources to be likely to deny Ouattara a first-round victory. The risk of violent unrest around the election is moderate.

Ouattara is not promising any major changes, but has campaigned largely on his track record of overseeing average growth rates of 6.9% since 2012, far above regional and continental peers.

Israeli Knesset reconvenes

Israel’s Knesset reconvenes for its winter session on Oct. 19, when the government led by Prime Minister Binyamin Netanyahu will again face a very high risk of losing its majority, reflecting demands by the ruling Likud party’s coalition partners—the two ultra-Orthodox parties—concerning military draft exemption legislation, and the two far-right parties over any ceasefire in Gaza without meeting their objectives.

The ultra-Orthodox parties, United Torah Judaism and Shas, have threatened again to topple the coalition by backing opposition requests for a no-confidence vote unless a draft bill text is agreed within the coalition by the start of the winter session, to be voted on subsequently. Members of the opposition had unsuccessfully sought a no-confidence vote in June and would be able to request another after a six-month cooling-off period, in December 2025. However, Israeli law allows the vote to be brought forward if a parliamentary petition obtains support from 61 of the 120 Knesset members.

The far-right, pro-settler Religious Zionism and Jewish Power parties have also repeatedly threatened to topple the government if Netanyahu accepts a ceasefire in Gaza before Israel’s military completely “dismantles” Hamas as a military and political organization. This demand is almost certainly a main driver for the ongoing Israeli military operations in Gaza.

Netanyahu is likely to become more willing to undertake measures that risk dissolving his coalition, as the next parliamentary election, scheduled for October 2026, draws closer.