Key Highlights
- Javier Milei’s decisive victory in the 2025 midterm elections gives him legislative capacity to push through reforms.
- The US offered a $40 billion bailout contingent on strong voter support for Milei, now seeing its potential benefits.
- Milei’s policies include austerity and free-market capitalism, but face social costs and risks.
- Argentina’s debt sales and peso value are optimistic amid investor confidence, but challenges remain.
The Triumph of Javier Milei: A Decisive Midterm Victory
In late October 2025, Argentina witnessed a significant political shift with the decisive victory of President Javier Milei in the midterm elections. The scale of his win surprised many political observers and strengthened his chances of consolidating his radical economic agenda. This electoral success marks a pivotal moment for Argentine politics and international relations.
A Validation of Economic Policies
Milei’s Liberty Advances party won an overwhelming majority, which validates his wider austerity policies and freedom-oriented approach. Even in the traditionally Peronist stronghold of Buenos Aires province, Milei’s party secured most seats. This victory is seen as a reflection of his economic strategies, which have tamed inflation but come with high social costs.
US Support and Economic Backing
The US has been deeply involved in Argentine politics, offering significant financial support. President Donald Trump provided a $40 billion (£30 billion) bailout tied to strong voter support for Milei. The immediate aftermath of the election saw praise from the Trump administration, with Secretary of the Treasury Scott Bessent expressing support and stating that the market should meet Argentina’s financing needs for 2026.
Investors reacted positively, pushing up the value of the Argentine peso by 10% on the Monday after the vote.
However, this gain was temporary as uncertainty about future policies led to a significant drop in value by Tuesday. Despite these fluctuations, there remains optimism that debt sales could provide much-needed US dollars.
Challenges Ahead
Milei’s policies have already seen some successes, such as lower inflation and government surplus. However, critics argue that the economic benefits are not yet felt widely among Argentinians. A fall in purchasing power due to rising supermarket prices and transport costs has left many citizens worse off.
Additionally, 250,000 jobs have been lost across public and private sectors, with 18,000 businesses closing down.
Milei’s government has faced criticism for vetoes on funding increases in higher education, disability allowances, and pensions—emotive policy areas likely to generate public backlash. The national budget could also come under renewed pressure, facing debt repayments of $3.3 billion to the IMF next year. Infrastructure projects crucial for supporting his growth strategy have been cut, leading to half of 2,700 unfinished public work projects remaining uncompleted.
Implications and Reflections
The midterms were not only a victory but also a moment of reflection for the opposition and political analysts. The vote marks an end to a volatile period in Argentine politics, described as similar to a Netflix series with many sequels yet to come. While Milei has weathered his first electoral challenge, numerous obstacles remain that could hinder the economic growth he promises.
The relationship between Argentina and the US is complex, with concerns about autonomy and potential colonization raising tensions.
The Argentine government’s actions, such as removing export taxes on grain only to re-impose them later, have fueled these fears.
As Milei faces both domestic challenges and international scrutiny, his path forward will be bumpy but promising for some. Whether the economic policies will deliver long-term stability and prosperity remains to be seen, but the stage is set for a significant transformation in Argentine politics and economy.
