Argentina’s midterm elections give a landslide victory to Miley’s liberal reform

Early results from Argentina’s legislative elections on Sunday showed a landslide victory for President Javier Miley as voters overwhelmingly backed free-market reforms and deep austerity measures, providing a strong boost to the liberal leader to continue his economic reform.

The president’s party, La Libertad Avanza, received 41.5% of the votes in Buenos Aires province, compared to 40.8% for the Peronist coalition, according to official results.

The province had long been a political stronghold for the Peronists, marking a radical political shift.

Nationally, La Libertad Avanza won 64 seats in the House of Representatives, up from 37 seats, according to government figures.

Miley was aiming to strengthen his small minority in Congress and maintain the support of US President Donald Trump, whose administration recently presented Argentina with a massive financial rescue plan but threatened to withdraw if Miley did not perform well.

Half of the members of the Argentine House of Representatives, or 127 seats, as well as a third of the members of the Senate, or 24 seats, are competing in the midterm elections.

The Peronist opposition movement has the largest minority in both chambers, while Miley’s relatively new party has only 37 deputies and six senators.

The White House and foreign investors have been impressed by the government’s ability to significantly reduce monthly inflation – from 12.8% before Miley’s inauguration to 2.1% last month – and achieve a fiscal surplus, and enact sweeping deregulation measures.

But Miley’s popularity has declined in recent months due to public frustration over his public spending cuts and a corruption scandal linked to his sister, who is also his chief of staff.

Political experts said more than 35% of the vote would be a positive result for Miley’s government and could allow him, through alliances with other parties, to block opposition lawmakers’ efforts to overturn vetoes of laws that Miley said threaten Argentina’s fiscal balance.

Miley said he expects a cabinet reshuffle after the election that could include members of the centrist Al-Moayad Party, a frequent ally of the government in Congress led by former President Mauricio Macri.

The election will be good news for the White House.

Trump’s potential $40 billion bailout of Argentina includes a signed $20 billion currency swap and a potential $20 billion debt investment facility.

Bonds and stocks are expected to rise on Monday as markets open, with the result giving Miley the votes and political capital needed to accelerate his reforms.

Following the results, many analysts expect a decline in the value of the peso, which they say has been overvalued to contain inflation.