Di Debatt - The 2026 Election Redraws the Investment Map

The government has always influenced the economy. But political ambitions to control, transform, and create new demand in the market are growing rapidly—something investors often underestimate. In today’s world, investors need to understand the significance of political drivers for capital allocation so as not to miss opportunities and risk significant losses, writes Paulo Silva, Founding Partner at New Republic Public Affairs, on Dagens Industri’s opinion page.

Defense spending is rising sharply. The energy system is being overhauled. Food security has become a matter of national security. Preparedness and security have become powerful drivers and justifications for market intervention, driving political governance and regulation more than the sustainability paradigm ever did. This perspective is pervasive, enjoys broad political support, and is gaining momentum beyond sectors that have always been heavily politically regulated, such as energy, infrastructure, and defense. The scope of politics is expanding across all sectors of society.

In this environment, it is not just the market that determines where capital is invested—politics has become an increasingly important factor. The 2026 election will therefore not merely decide who governs state affairs. It will determine the map of investments—and could, in practice, redraw entire markets.

An often-overlooked aspect of investment analysis is that politics not only affects the supply side but also directly shapes demand in individual markets. A government comprising the Social Democrats, the Green Party, the Center Party, and the Left Party, and a “Tidö 2” government in which the Sweden Democrats hold the most ministerial posts, would result in two different investment landscapes; however, both scenarios would lead to politics becoming a more powerful instrument for capital allocation.

A Tidö 2 government will tie up hundreds of billions of kronor in nuclear power expansion, a development that will have consequences for investments in other energy sources, energy efficiency, and storage compared to an S-led government alternative. Modernization and NATO alignment drive investments in both military capacity and related sectors. The education market will be reshaped if the Liberals remain in the government. A common perception is that center-right parties focus more on general taxes, but in practice this has been combined with incentives for specific sectors. Lower taxes on fuel and reduced VAT on food are examples of this.

A red-green coalition government (S, MP, C, and V)—which, according to opinion polls, must be viewed as the primary scenario for investors at this time—would result in a government that is more selective in its allocation of resources. Policy would be concentrated in areas where there is consensus, from V to C—and where the government actively reduces risk and directs capital.

A red-green government coalition will likely mean that more people—both younger and older—are included in the dental care system. This would immediately increase demand and alter the revenue base for dental care companies. Stronger incentives for purchasing electric cars directly impact demand in the automotive sector. Price regulation or other restrictions on veterinary services hit margins hard in a sector that has long been characterized by high profitability and alters the calculations of PE firms. The Green Party’s proposal to halve employer contributions for food producers, combined with the Center Party’s policy for the sector, creates strong triggers for investment and growth in the food sector.

In a red-green scenario, investments in the power grid, energy efficiency, and industrial transition are prioritized alongside the expansion of wind and solar energy. The state acts as an enabler and risk-sharer. However, the state could also establish its own investment bank and decide to focus Sweden’s competitiveness on specific technologies. These are examples of concrete, cash-flow-impacting decisions and directions that will guide, for instance, future research, innovation support, and industrial policy.

This shift places new demands on investors. Analyzing the market, technology, and financial metrics is no longer enough. In an economy where politics increasingly influences factors such as risk and demand, the political dimension must also be systematically analyzed. This is particularly true in transactions. Acquisitions that appear rational from a market perspective can quickly change in value when political decisions alter the rules of the game.

The need for structured political due diligence—an examination of regulatory risks, political incentives, and likely policy changes—must therefore become an integral part of the investment process.

Regardless of the government’s composition, one thing is clear: the state has become a central player in capital allocation. The 2026 election will therefore be a political crossroads that leaves a decisive mark on the investment landscape. The question is therefore not just who wins the election. The question is: which markets will change—and who is prepared.

Paulo Silva, Founding Partner at New Republic Public Affairs and a member of NR’s Political Due Diligence Team

Read the article here:

https://www.di.se/debatt/valet-2026-ritar-om-investeringskartan/