"Irresponsible fiscal policy" is on the rise as governments increasingly try to appeal to angry voters, according to a chief investment officer overseeing international macroeconomic trends.
Speaking with CNBC on Tuesday, Michael Hasenstab, chief investment officer at Templeton Global Macro, a unit under Franklin Templeton Investments, called the trend a response to populism — a term with varied definitions — and emphasized that political risk had become a pressing investment consideration.
"One of the main factors that we look at throughout emerging markets and the developed markets, take Italy for example, is the rise of populism leading to irresponsible fiscal policy. Probably one of the most important political variables we have to look at," Hasenstab told CNBC's "Squawk Box."
He added, though, that such trends are not present everywhere, and "that creates an opportunity to look at the politics, and identify those countries that are not on that deteriorating path."
A new government took power in Italy this year led by a coalition formed by the anti-establishment Five Star Movement and the right-wing League party. It pledged to embark on tax cuts, guaranteed basic monthly wages for the poor, and committed to other spending in the already-debt-ridden country.
Germany's mainstream political parties, for their part, have been under pressure from a rising challenge from the far-right. The country's government recently set out measures to tackle a drastic shortage of affordable housing, a problem that detractors have argued was caused by an influx of migrants.