Argentina President Alberto Fernández said he won’t run for re-election as the country faces over 100 percent inflation, opening the race within the ruling Peronist coalition to pick a candidate ahead of October elections.
“On December 10, 2023, 40 years after the nation returned to democracy, I will deliver the presidential sash to whomever is legitimately elected at the polls by popular vote,” Fernández said in a video posted Friday on his Twitter account.
While unsurprising amid a slump in government popularity, Fernández’s announcement opens the door for Argentina’s left-leaning ruling Frente de Todos coalition to decide on another candidate amid intense infighting. Annual inflation reached 104 percent in March and the crisis-prone economy also faces an historic drought and waning international reserves, leading the government to try to renegotiate its US$44-billion lending programme with the International Monetary Fund.
Argentina’s economy is expected to contract two percent this year, according to a Bloomberg News survey published Friday.
“Fernández’s decision came earlier than expected,” said Ignacio Labaqui, an analyst for Medley Global Advisors in Buenos Aires. “Nobody really believed that he stood any chance of seeking another term in office.”
International investors are already positioning for voters to pan Fernández’s left-leaning coalition in October’s elections, betting Argentina will elect a market-friendly government or a rage-fuelled political outsider to bring the economy back from the brink.
Argentina’s US$16.1 billion in overseas bonds due 2030 gained 0.7 cent on Friday to around 25 cents on the dollar.
Polls showed Fernández’s approval rating dropped below 20 percent earlier this year, with nearly 40 percent of the country living in poverty and expectations for another recession this year. His government faced one setback after another, from the Covid-19 pandemic that killed 130,000 Argentines to the ripple effects of Russia’s invasion of Ukraine followed by the worst drought on record in the South American nation this year.
Beyond international issues, domestic problems plagued Fernández’s term too. His broad Peronist coalition suffered from intense political fights between him and Vice-President Cristina Fernández de Kirchner over economic strategy almost since his inauguration in 2019. The government never came forward with an economic plan seen as credible by markets and Fernández even said in 2020 he didn’t believe in big-picture road maps.
Fernández’s decision to step aside was applauded by rivals within his coalition. Interior Minister Eduardo de Pedro, a Fernández de Kirchner ally seen a potential candidate backed by more radical factions of the coalition, called the announcement “a necessary step to start to put order in Peronism.”
Pollsters say the move also clears a path for Economy Minister Sergio Massa, a senior leader in the coalition, to run as the government’s candidate. Massa, who already lost a presidential bid in 2015, has deflected questions on becoming a candidate, saying he couldn’t campaign and manage the economy at the same time. He didn’t comment on Fernández’s decision as of Friday midday, nor did his press office respond to a request for comment.
“The most important issue within the coalition is whether Massa decides to be a candidate or not,” says Lucas Romero, director of Argentine polling firm Synopsis. Massa’s decision “will occur toward the deadline to announce candidacies, which is June 24.”
Last month Mauricio Macri, who preceded Fernández as president and is a leader of the business-friendly opposition coalition, also ruled out becoming a candidate, clearing the way for a primary race between members of his political space.