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Argentine President Javier Milei’s party has achieved a decisive victory in the country’s midterm legislative elections, securing a mandate to continue his radical economic overhaul despite public discontent over severe austerity measures. This outcome offers a significant boost to Mr Milei, whose approval ratings had recently dipped. The stronger-than-expected showing is believed by analysts to reflect a public fear of renewed economic turmoil should the nation abandon Milei’s stringent policies. While these measures have drastically cut subsidies many Argentines relied upon, they have also succeeded in significantly slowing inflation. The results are also likely to please Donald Trump, whose administration had previously faced criticism following a substantial financial bailout provided to Argentina. Addressing a crowd of supporters in Buenos Aires, a triumphant Mr Milei stated: "Argentines showed that they don’t want to return to the model of failure." Gustavo Cordoba, the director of the Argentine Zuban Cordoba polling firm, said he was surprised by Milei's showing and thought it reflected concern about potentially repeating the economic crises of past governments. "Many people were willing to give the government another chance," he said. "We'll see how much time Argentine society gives the Argentine government. But the triumph is unobjectionable, unquestionable." Cordoba said Milei's government appeared to have secured the one-third of seats it needs in the Chamber of Deputies to prevent any future presidential vetoes from being overturned by Congress. In the last few months, the opposition had overturned several Milei vetoes of spending bills he had said threatened the country's fiscal balance. "The result is better than even the most optimistic Milei supporters were hoping for," said Marcelo Garcia, Americas director of risk consultancy Horizon Engage. "With this result, Milei will be able to easily defend his decrees and vetoes in Congress," Garcia said, adding that allies will have more of an incentive to support a winning president. Indeed, in his celebratory speech, Milei suggested a deeper willingness to form partnerships, saying "there are dozens of deputies and senators from other parties with whom we can reach basic agreements." Foreign investors have been impressed by the government's ability to significantly reduce monthly inflation from 12.8 per cent before Milei's inauguration to 2.1 per cent last month, while achieving a fiscal surplus and enacting sweeping deregulation measures. To support Milei, the Trump administration offered a bailout potentially worth $40 billion, including a $20 billion currency swap that is already 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 result. The president's party, La Libertad Avanza, scored 41.5 per cent of the vote in Buenos Aires province compared with 40.8% for the Peronist coalition, according to official results. The province has long been a political stronghold for the Peronists, marking a dramatic political shift, and a major comeback for Milei from Buenos Aires congressional elections in September. Nationwide, La Libertad Avanza got 64 seats in the House of Deputies, up from 37, according to government figures. Half of Argentina's lower Chamber of Deputies, or 127 seats, as well as a third of the Senate, or 24 seats, were up for election in the midterm vote. The Peronist opposition movement held the largest minority in both houses, overshadowing Milei's relatively new party. Political experts had said that capturing more than 35 per cent of the vote would be a positive outcome for Milei's government. Maria Laura Tagina, a political scientist at the Universidad Nacional de San Martin, said that while Milei’s approval rating had suffered from fatigue over austerity measures and corruption scandals, it was possible disillusioned Argentines decided to stay home. Voter turnout was around 68 per cent, the lowest in more than a decade, media outlets reported. Milei has said he expects a cabinet shake-up after the election that could include members of the centrist PRO party, a frequent ally of the government in Congress led by former President Mauricio Macri. Bonds and stocks are expected to rally on Monday when markets open, as the result gives Milei the votes and political capital needed to accelerate his reforms. Many analysts also predicted there would be a devaluation of the peso, which they say has been overvalued to contain inflation.
