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Political Uncertainty

Definition

Political uncertainty refers to unpredictability regarding government policies, leadership, or geopolitical stability. This state of ambiguity can arise from elections, policy shifts, legislative changes, or international conflicts, impacting economic forecasts and investor confidence. Such conditions introduce variables that make future market conditions difficult to predict, influencing asset valuations and capital flows. It often leads to increased volatility across traditional and digital financial markets as participants adjust their risk assessments.