Argentina: Javier Milei's party suffers setback in important provincial test election in Buenos Aires

Argentine President Javier Milei suffered a significant setback on Sunday, September 7, in an election in the important province of Buenos Aires, a test for the mid-term legislative elections in October. According to official results with 93% of the votes counted, Mr. Milei's libertarian La Libertad Avanza (LLA) party received just under 34% of the vote, compared to more than 47% for the Peronist opposition Fuerza Patria (center-left) in the province of Buenos Aires, which accounts for more than a third of the Argentine electorate. Despite the defeat, the president promised to "accelerate" the progress of his ultraliberal reforms.

With the province being a Peronist stronghold, an LLA victory in the election was hardly expected, but the seemingly significant margin, of around 13 percentage points or more, belied most polls, which had predicted a close race. This was the first major electoral test for Javier Milei since he took office in December 2023, on a program to revive an economy mired in chronic inflation and debt by slashing public spending.

However, Milei's party, which for this provincial election had formed an alliance with the PRO party of former liberal president Mauricio Macri (2015-2019), is expected to gain ground in the Buenos Aires provincial assembly, which was being renewed in this election. It is expected to double its contingent of 12 seats (out of 92). Javier Milei bluntly acknowledged on Sunday that "politically [it was] a clear defeat." But "the course for which we were elected in 2023 will not change (...), we will deepen it and accelerate it," he declared at his party's electoral headquarters in La Plata, south of Buenos Aires. "We have to learn from this," Diego Valenzuela, an LLA candidate, told Agence France-Presse (AFP), believing that the result "is due to [Milei's] desire not to be populist in the economy, which is new in Argentina."

The subdued, offbeat atmosphere at the LLA headquarters, with some supporters quickly dispersing after the head of state's speech, contrasted with the exuberance at the Peronist headquarters, where the provincial governor, Axel Kicillof, was greeted with shouts of "You can feel it, you can feel it, Axel is president!" , in reference to the 2027 presidential election, AFP noted. "He's going to have to change course!" Mr. Kicillof said in direct response to the president. "Milei, the people have just given you an order (...) : govern for the people!" he added.

Axel Kicillof, 53, one of the opposition leaders, is seen as its only possible presidential candidate, especially since the former president and icon of the Argentine left, Cristina Kirchner, 72, has been serving a life sentence and disqualification at home since June, following her conviction for fraudulent administration during her mandate (2007-2015).

Sunday's election came at a delicate time for the Milei government, despite its impressive results over the past two years—albeit at a high social cost—against inflation, which has fallen to 17.3% over the seven months since January, compared to 87% over the same period in 2024. The government was rocked in August by a scandal involving alleged bribery within the National Agency for Disability, which implicates Karina Milei, the president's sister and secretary general of the presidency, who, however, has not yet been directly implicated by the courts. Javier Milei also suffered a major legislative setback on Thursday, September 4, when parliament, for the first time during his presidency, overturned a presidential veto on a law providing increased funding for people with disabilities. According to the government, this veto was carried out in the name of a sacrosanct budgetary balance, which it again promised on Sunday not to sacrifice in any way.

Furthermore, on the economic front, the government, in a notable shift, began intervening this week in the foreign exchange market to halt the depreciation of the peso, which had accelerated recently amid pre-election jitters in the financial markets. Their reaction on Monday, September 8, to Mr. Milei's electoral setback was one of the post-election unknowns. However, Sunday's provincial result does not necessarily foreshadow the national elections in October (which will renew a third of the Senate and half of the deputies). Polls consistently suggest a hard core of approval for Javier Milei of around 40% or even higher.