Javier Milei’s landslide victory renews hope for investors and the Argentinian economy, defeating the left-wing populist Peronism movement with 40% compared to 31%. Polls predicted a major defeat with his approval rating dropping to 39.9% in October, the lowest level since he took office. However, winning 13 of the 24 Senate seats available and 64 of the 127 Deputies seats, Javier Milei defied expectations.
Supporters hope the victory will allow Argentina to finally break from its debt-ridden past through deep spending cuts, lower taxes and a more stable economic outlook.
The surprise election victory comes as the financial situation in Argentina seems bleak caused by Argentina’s peso plummeting by 30% since January 2025. With a lack of confidence in its financial markets, investors were quick to sell the peso. This lack of confidence comes from a combination of factors including the IMF deal in April 2025 loosening currency controls. As well as the 2025 midterm elections which could upend Argentina’s relative fiscal stability under cost-cutting Milei, with the Peronist movement gaining in the polls.
An election victory for the Peronists could dramatically slow down Javier Milei’s economic agenda causing political gridlock in the Argentine National Congress. Possibly even revert back to the former economic status quo that brought nothing but high inflation, debt and a bleak economic forecast.
Attempting to solve this currency crisis, Milei burnt through billions of US dollars draining Argentina’s foreign exchange reserve to try and save the peso. However, with its already limited currency reserves, this move didn’t successfully halt the rapidly declining peso.
However, amid this turmoil, a surprising external lifeline emerged. Under one condition, that Milei would come out victorious over the Peronists in the Mid-term elections. The U.S. President Donald Trump, a political ally of Milei, pledged support for Milei’s midterm campaign through a proposed US$20 billion currency swap and an additional US$20 billion loan from private banks to stabilise the Peso. The move was politically risky for Trump, whose “America First” stance traditionally opposes such foreign commitments.
Eventually, to the surprise of many, including Milei, La Libertad Avanza were the clear winners of the election. The result helped stabilise financial markets, with early signs of the peso beginning to recover. It also gave Milei a powerful mandate to press ahead with the economic reforms he has long promised, this time without the gridlock that hampered earlier efforts in Congress. Supporters hope the victory will allow Argentina to finally break from its debt-ridden past through deep spending cuts, lower taxes and a more stable economic outlook.
