Argentine President Javier Milei’s libertarian party, La Libertad Avanza, has scored a significant victory in the recent midterm legislative elections. With about 40.8% of the votes, they outpaced the Peronist opposition, which managed around 31.6%. This outcome gives Milei new momentum for his ambitious free-market reforms, especially after a recent financial crisis had put his plans in jeopardy.
Voter turnout was 68%, slightly down from 71.8% in the 2021 elections. The results are crucial for Milei as he aims to revive Argentina’s struggling economy, which has faced many challenges, including a run on the peso last month due to investor fears about his reforms.
The victory may also bolster Milei’s relationship with high-profile allies, including former US President Donald Trump. Trump recently provided financial support but hinted that ongoing assistance would depend on this election result. Additionally, US Treasury Secretary Scott Bessent has promised significant backing, potentially up to $40 billion, crucial for stabilizing Argentina’s economy.
Out of the 257 seats in Argentina’s lower house, 127 were contested. La Libertad Avanza won 64, bringing their total to 92 seats. Amilcar Collante, an economics professor at La Plata National University, stated that the new seats give the government a better chance to push through reforms over the next two years, suggesting a potential stock and bond rally in response.
The mood in Buenos Aires was electric, with supporters cheering joyfully in the party’s purple colors. On the flip side, the Peronist party faced setbacks, particularly after a previous victory in the Buenos Aires provincial elections last month, which had initially fueled doubts about Milei’s leadership.
Juan Grabois, a youth leader from the Peronist party, criticized Trump’s influence, asserting that the US president’s support had tilted the scale unfairly. Meanwhile, former President Mauricio Macri, a key ally of Milei, encouraged him to strengthen his cabinet for better governance, indicating his readiness to assist.
Interestingly, the peso showed signs of recovery, appreciating over 7% against the dollar on crypto exchanges following the election results. This shift could indicate renewed investor confidence or a market reaction to Milei’s victory.
As Argentina navigates these changes, it remains to be seen how effectively Milei will implement his reforms and address the challenges ahead. The reactions from both supporters and detractors will be pivotal in shaping the political landscape in the months to come.
For more insights on Argentina’s economic landscape, you can check the World Bank report.
