Argentina’s opposition grabbed momentum in the run up to the October presidential election by beating the ruling party by a larger-than-expected margin in Sunday’s key PASO primary vote.
With 84 percent of ballots counted, Alberto Fernández had 47 percent of votes versus 32 percent for Macri. Pollsters have long said that Macri would have trouble overcoming defeat by a margin of more than seven percentage points.
“We had a bad election,” Macri told supporters in Buenos Aires even before official data was released. “We’ll have to double our efforts ahead of the October election.”
The results are poised to trigger a market sell-off on Monday as investors come to terms with the possibility that the market-friendly policies adopted by Macri during the past four years may be replaced by the type of interventionist measures that were common place under former president Cristina Fernández de Kirchner, Alberto Fernández's running-mate.
The former president nationalised pension funds, imposed currency controls and tampered with economic statistics during her presidency between 2007 and 2015.
Macri succeeded her in office with pledges to boost the economy with liberal policies, but was forced to seek a record US$56-billion bailout from the International Monetary Fund and raise interest rates to more than 60 percent following a currency crisis last year. While the economy started to show signs of slowly recovering from recession, inflation remains above 50 percent and unemployment is in the double digits amid his austerity measures.
Monday’s likely sell-off will probably be exacerbated by a last-minute wave of optimism about Macri’s prospects that caused the Merval stock index to jump 6.7 pecent.
“This election is over, there’s no way the government can overcome this,” said Lucas Romero, director of polling firm Synopsis.
To win outright on October 27, the top candidate must receive 45 percent of valid votes, or 40 percentof them with a 10 percentage point difference from the second-placed contender. If neither scenario happens, there’s a runoff vote on November 24. Polls for weeks have shown Macri and Fernández likely heading toward a run-off.