Markets on edge as Argentines vote in crucial midterm election
Argentina votes in a high-stakes midterm election that could decide President Javier Milei’s reform agenda, the future of the peso, and U.S. financial support.
Argentina heads to the polls today in a decisive midterm election that could determine whether President Javier Milei can sustain his free-market reforms and end the country’s currency turmoil, News.Az reports, citing foreign media.
Milei’s La Libertad Avanza (LLA) party is fighting to expand its limited presence in Congress — a key step to passing tax and labor reforms seen as essential to his libertarian agenda. Half of the lower house and one-third of the Senate are up for election.
The stakes are high: recent political setbacks and a peso sell-off have shaken investor confidence, pushing the currency to a record low of 1,490 per U.S. dollar this week. Despite a $20 billion swap deal and direct U.S. Treasury intervention, markets remain volatile.
“The better the government performs, the stronger the peso will be. If it loses badly, Monday will be very sour,” said Nery Persichini, head of strategy at GMA Capital.
Analysts say Milei needs at least 35% of the vote — or a lead over the left-wing Fuerza Patria coalition — to reassure markets. Even then, his party’s small numbers mean passing bills will depend on persuading moderate opposition lawmakers to cooperate.
Milei has won praise for sharply reducing inflation — from 289% in April 2024 to 32% last month, the lowest in seven years. Yet austerity measures have fueled anger among millions of Argentines struggling with falling wages and pensions.
“Everything is so expensive, I had to take out a loan just to top up my subway card,” said Eliana Camus, a cleaner from Buenos Aires province.
Others back Milei’s reforms despite the hardship.
“It’s been very hard, but there’s no other option if we want to move forward,” said Ruben Rodríguez, a retired hairdresser.
The U.S. has tied continued financial support to Milei’s policy discipline. President Donald Trump warned that Washington’s aid could depend on Sunday’s results. Meanwhile, U.S. Treasury Secretary Scott Bessent said the backing hinges on Argentina maintaining “robust” fiscal policies.
Economists warn that Milei may soon have to devalue the peso, even slightly, to prevent further reserve depletion.
“If the government performs well, a 10% devaluation could stabilize the economy,” said Santiago Bulat of Inveqc Consultancy. “But a poor result could trigger a deeper crisis.”
Whatever the outcome, Argentina faces critical weeks ahead. The election will not only shape Milei’s reform agenda but could also determine whether the country’s fragile economy stabilizes — or sinks deeper into uncertainty.
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