Milei’s future hangs in the balance at Sunday’s midterms
Saturday, October 25th 2025 – 10:58 UTC
Bessent’s US Treasury handouts kept the peso from a sharper fall leading up to the polls
Sunday’s midterm elections in Argentina have been deemed crucial for the future of President Javier Milei’s La Libertad Avanza and its drastic “chainsaw” economic reforms amid mounting recession and a sharp slowdown despite bailouts from Washington.
From a strictly political standpoint, Argentines will renew nearly half of the seats in the Lower House (127 out of 257), with LLA, a new force by all accounts, risking only 22% of its seats there.
The country is also renewing one-third of the Senate (24 out of 72 seats), none of LLA’s at stake. Hence, Milei’s party can only hope to win on this front. It badly needs to reach at least a one-third minority to uphold presidential vetoes. LLA’s allies, such as former President Mauricio Macri’s Propuesta Republicana (PRO), face a challenging outlook, risking nearly 60% of their Deputy seats. The opposition Peronist under the Fuerza Patria label and its allies are risking nearly half of its Deputies and the most seats in the Senate.
The elections will produce 24 separate results —one for each of the 23 provinces and another for the Autonomous City of Buenos Aires (CABA). Eight of these electoral districts are also choosing Senators (three each). The national focus will be on the aggregated difference in votes between LLA and the Peronist coalition.
The government’s proposal to count votes nationally (aggregating all provincial data) was rejected by the Court of Appeals in Electoral Matters (CNE), which ordered results to be published by district. LLA would have benefited from an aggregated count, as it uses the same name nationwide, while the Peronist coalition uses local names in ten provinces.
Historically, mid-term elections in Argentina are adverse for ruling parties. In only one of the last seven presidencies (Mauricio Macri in 2017) did the ruling party increase its vote share compared to the presidential election. The average number of seats won by ruling parties in mid-term Deputy elections since 1983 is 50.
LLA has only been the most-voted force in two of the ten provinces that held separate provincial elections this year: CABA and Chaco (where it joined forces with the UCR). In the critical province of Buenos Aires, the Peronist party won by nearly 14 points, an early result that created political instability for the national government.
Voter turnout has been decreasing in the last two mid-term elections, and participation will be a key factor. For the first time in a national election, the Single Paper Ballot (BUP), which groups all candidates per category on one sheet, will be implemented.
On the other hand, from an economic perspective, markets have been vigilant of the outcome, fearing a sharp devaluation of the Argentine peso against the US dollar, which has not yet taken place, thanks to repeated interventions from the US Treasury to stabilize the currency, with US$400 million on Friday alone, despite which the dollar climbed to AR$1,515.
Earlier this month, US Secretary of the Treasury Scott Bessent announced an unprecedented US$20 billion swap agreement with Argentina’s Central Bank (BCRA).
Despite these efforts, the dollar appreciated by 72 pesos over the past two weeks, driven by increased demand from savers seeking protection ahead of the elections and credit card holders converting balances into dollars to cover international purchases and streaming services.
The 35 business days since the government’s defeat in Buenos Aires have been marked by extreme volatility. Sharp currency fluctuations tend to delay investment decisions. Fear persists for the day after the elections. Although Economy Minister Luis Toto Caputo anticipated no changes, traders know it will all hinge on Sunday’s outcome.
