Sunday's midterm elections – five things to know

Two years after a stunning election victory, President Javier Milei faces a tough legislative election on Sunday.

The results will determine whether Milei's budget-slashing cuts and attempts to deregulate the economy will survive. Financial markets and international investors are watching very closely.

Argentina’s President needs stronger representation in Congress if he is to continue his sweeping reform push.

Here are five things to know about the October 26 ballot, which will choose half of the country's 257 deputies and a third of its 72 senators.

Who loses, wins?

In 2023, Milei upended the political landscape with his outsider rhetoric and anti-politics discourse, winning a resounding 56 percent of votes in a presidential run-off.

However, his young party, La Libertad Avanza did not fare as well, securing only 37 deputies and six senators. It is firmly in the minority and – given not all lawmakers are up for renewal this time out – it will be unable to achieve a majority.

That has allowed a hostile Congress to repeatedly block his reforms, notably the privatisation of flagship carrier Aerolineas Argentinas, state-run energy firm YPF, nuclear power plants and public media.

Polls suggest Milei's party will almost certainly boost its current seat numbers, but an outright majority still seems out of reach.

Securing a third of seats (up from 15 percent today) would allow him to veto hostile legislation and attempts to reverse presidential vetoes. "That would be a good number," he says.

Hope is gone

Milei can tout some successes going into Sunday's vote. Inflation is down from 200 percent to 31 percent – although it is likely to rise again, if the peso is allowed to devalue as markets expect. The budget is balanced for the first time in 14 years.

But the reforms have come at a high price for many Argentines. Over 200,000 jobs have been lost and the economy was in recession for much of 2024. The removal of government subsidies has meant housing, healthcare and education costs have soared.

"We're the same as two years ago, but worse," grumbles Héctor Sánchez, a 62-year-old waiter. "The hope that was there is gone.”

Once a Milei voter, he is now undecided. "I'd like him to succeed, but I doubt he will."

“This government promised a lot and I see nothing (...), he didn’t create any new jobs,” said Sánchez.

He sees a lack of options: "The other side has nothing. And I don’t want to go back to before."

The President's lustre has also been tarnished by corruption allegations that hit his inner circle.

José Luis Espert, a national deputy and economist close to Milei, recently dropped out of the election over past ties to an alleged drug-trafficker.

Powerful friends

With Milei under mounting pressure, ideological ally Donald Trump rushed to his rescue with a US$20-billion financial and political bailout.

Economists warn the largesse might be a "financial Vietnam" for the United States, requiring Washington to pump in good money after bad to prop up Milei and the peso.

Argentines fear a peso devaluation or depreciation after the vote despite US intervention. And the opposition has made hay from Milei's ties with the Trump administration

"Orders now come from Washington... Trump is Milei's campaign manager," said Axel Kicillof, the Peronist governor of Buenos Aires Province.

According to Mauricio Monge, an economist for Latin America at Oxford Economics, Washington’s aid "is not sufficient to counter the growing possibility that electoral results prevent additional reforms.”

'Lion' tamed?

Ahead of the vote, Milei has looked to soften his image as a norm-smashing political warrior.

Since a September regional election loss, there have been fewer insults toward opponents or journalists, more outreach to provincial governors, and a hint of empathy with references to "vulnerable" Argentines.

The man who likes to call himself "the Lion" still wants to be edgy. He recently donned his rocker leather jacket for a surreal rally-concert aimed at pleasing his hardcore base.

Will his newfound pragmatism continue after the vote?

"Milei might strike temporary deals, push a less radical reform than he wanted, just to show he delivered," predicts Gabriel Vommaro, a political scientist with the CONICET national scientific research centre.

"But a full 'normalisation' of Milei, or a broader coalition? I'm not sure he can, or even wants to," said Vommaro.

Centrist challenge?

Milei's party will run solo in some districts, and in others is allied with pro-business Republican Proposal – not a governing partner but often a source of votes.

Facing this "pro-Milei" bloc is the Peronist opposition, in power for 17 of the past 23 years.

It is still regrouping from the shock of 2023. Former president Cristina Fernández de Kirchner's star has faded – she was convicted of corruption and is ineligible to run for office.

Kicillof, the 54-year-old governor of Buenos Aires Province, is gaining stature ahead of the 2027 presidential race.

But both the Peronists and Milei face a new challenge in the form of Provincias Unidas, a centrist federalist and province-based force led by half a dozen governors that could have a solid showing.