buenos aires, argentina
Reuters
—
Argentina’s President Javier Millei’s party edged toward victory in midterm parliamentary elections as voters gave him a mandate to continue pushing for an overhaul of the economy despite widespread dissatisfaction with his sweeping austerity measures.
While the result is a relief for Milay, whose poll numbers have been weak in recent weeks, the result is also likely to satisfy US President Donald Trump, who has come under fire for providing Argentina with huge amounts of financial aid.
Analysts said the better-than-expected indicators could reflect fears of renewed economic turmoil if the country abandons Prime Minister Milay’s austerity measures, which have managed to significantly slow inflation while cutting subsidies that many Argentines have long relied on.
After the result, a triumphant Millay told a crowd of supporters at a hotel in Buenos Aires, “Argentines have shown that they don’t want to go back to the model of failure.”
Gustavo Córdoba, director of Argentine polling firm Zubán Córdoba, said he was surprised by Milay’s answer and thought it reflected past governments’ concerns about a potential repeat of economic crises.
“A lot of people were willing to give the government another chance,” he said. “We will see how much time Argentine society can give the Argentine government. But this victory cannot be disputed or doubted.”
Cordova said Milley’s government appears to have secured the one-third of seats needed in the House to prevent a future presidential veto from being overridden by Congress. In the past few months, opposition parties have overturned multiple vetoes of Mirai on spending bills that they say threaten the country’s fiscal balance.
“This is a better result than even the most optimistic Millais supporters expected,” said Marcelo Garcia, Americas director at risk consultancy Horizon Engage.
“This result will make it easier for Milley to defend her decrees and vetoes in Congress,” Garcia said, adding that allies will have more incentive to support the victorious president.
Indeed, in her celebratory speech, Milley suggested there was a growing desire to form partnerships, saying, “There are dozens of members and senators from other parties with whom we can reach a basic agreement.”
Foreign investors have been impressed by the government’s ability to slash monthly inflation from 12.8% before Milais took office to 2.1% last month, while running a budget surplus and taking drastic deregulatory measures.
To help Mr. Milley, the Trump administration has proposed a bailout package potentially worth $40 billion, including a $20 billion currency swap that has already been signed and a proposed $20 billion debt investment facility.
The White House did not immediately respond to a request for comment on Sunday’s election results.
In Buenos Aires province, the president’s party, La Libertad Avanza, won 41.5% of the vote, compared to 40.8% for the Peronist coalition, according to official results. The province, long a Peronist political stronghold, marked a dramatic political shift, with Millay making a major comeback from September’s Buenos Aires parliamentary elections.
Nationally, La Libertad Avanza won 37 to 64 seats in the lower house, according to government statistics.
Half of Argentina’s lower house (127 seats) and one-third of the upper house (24 seats) are up for election in the midterm vote. The anti-Peronist movement had the largest minority in both houses, overshadowing Milais’ relatively new party.
Political experts had said that winning more than 35% of the vote would be a positive outcome for Millais’ government.
María Laura Tagina, a political scientist at the National University of San Martín, said that while Millay’s approval ratings have slumped due to fatigue over austerity measures and corruption scandals, Argentines may have become disillusioned and decided to stay home. According to media reports, turnout was around 68%, the lowest in more than a decade.
Millay said he expected there would be a cabinet reshuffle after the election, including members of former President Mauricio Macri’s centrist PRO party, which is a frequent government ally in parliament.
Bonds and stocks are expected to rise when markets open on Monday, as the result will give Mr. Milley the votes and political capital he needs to accelerate reforms.
Many analysts also predicted a devaluation of the peso, saying it was overvalued to curb inflation.
This story has been updated with additional information.
