Key Highlights
- Javier Milei’s party won nearly 41% of the vote in Argentina’s midterm elections.
- The win will make it easier for Milei to push ahead with his austerity program.
- Milei has cut budgets, laid off public sector workers, and propped up the peso.
- Support from US is conditional on Milei’s political momentum.
Economic Austerity Triumphs in Argentine Midterms
In a significant victory for his radical economic policies, Javier Milei’s party, La Libertad Avanza, won nearly 41% of the vote in Argentina’s midterm elections. This outcome will bolster Milei’s ability to implement more drastic fiscal measures and free-market reforms as he continues his campaign to shrink state spending.
Milei’s Economic Agenda
Since taking office in 2023, Milei has championed a “chainsaw” approach to reduce government spending. His program includes slashing budgets for education, pensions, health, infrastructure, and subsidies. Additionally, he has laid off tens of thousands of public sector workers.
His efforts have been partly successful in taming inflation, which had reached triple digits before his administration took over. However, critics argue that these policies come at a cost: job losses, declining manufacturing, crumbling public services, reduced purchasing power, and an impending recession.
US Support and Political Challenges
The US has offered Argentina a potential $40 billion lifeline via a currency swap, buying pesos, and arranging private investments. This support is conditional on Milei’s political momentum. Before this election, doubts had grown about the sustainability of his cost-cutting agenda due to voter fatigue and corruption scandals within his party.
Despite these challenges, Milei’s supporters remain optimistic. “We must consolidate the path of reform we have embarked upon,” he declared during a victory rally in Buenos Aires. The high turnout of 67.9% suggests that many Argentines are unwilling to return to the Peronist model associated with decades of economic mismanagement.
Impact on Future Policies
The significant gains for Milei’s party position him well ahead of the next presidential election in 2027, when his name could be on the ballot once more. For now, it remains to be seen whether ordinary voters will start feeling better off or if the pain from some of his cuts tests their patience.
“There’s a certain false hope,” said Thiago, a political science student. “There’s a lack of investment in hospitals, infrastructure, in people with disabilities.” Despite these concerns, many Argentines remain committed to Milei’s vision for economic transformation. The election result shows that they are willing to give him more time to implement his policies.
The victory also carries implications for financial markets and the broader political landscape in Argentina.
A significant portion of voters appear prepared to endure the short-term pain for potential long-term benefits. Whether these hopes will materialize remains to be seen, but Milei’s new mandate gives him greater leverage to push through more radical changes.
