Argentinian President Javier Milei casts his vote at a polling station within the National Technological University, in Buenos Aires on October 26. Voters supported his ruling party. Photo by Juan Ignacia/EPA
Argentina has entered a new political and economic phase after the Oct. 26 legislative elections, in which the ruling party La Libertad Avanza won 40.7% of the vote and reinforced support for President Javier Milei.
The result cleared the way for the government to advance an agenda centered on two priorities: tax and labor reforms, both aligned with International Monetary Fund requirements and seen as key to reviving the economy.
Although voters renewed their support, analysts warn that backing is fragile and depends on whether economic improvements are felt in people’s wallets.
“The expectations surrounding Milei remain high, although this comes alongside a certain apathy among a segment of the electorate that supported him in 2023,” Cristian Buttié, director of CB Consultora, told UPI.
“About 28% of the electorate makes up his core base, and another 13% of apathetic voters joined in this election — voters who are not in love with Javier Milei, but chose him,” Buttié said.
That group, he said, backed Milei again largely because memories of the previous administration remain strong.
“The greater evil would be the return of Peronism. The lesser evil was supporting this government,” Buttié said.
He warned that this “reserve of trust” will erode if economic conditions do not improve.
“What is sought is for that economic improvement to reach people’s wallets. For that reason, his main challenge is to reactivate the economy: for consumption to grow and for more jobs to be created,” Buttié said.
For the administration, that goal is directly tied to passing tax and labor reforms. “If the economy does not improve, it will be very difficult for Milei to break through the ceiling he already has, because he will be left relying only on his core base,” he said.
Economist and political scientist Agustín Pineau agreed that those reforms are the administration’s priority and noted that they are aligned with the requirements of the IMF, which approved a new financing program with Milei worth about $20 billion.
In his analysis, Pineau said the fiscal changes will likely create conflict with provincial governors.
“They need public funds to run their provinces, particularly to pay salaries and pensions, and above all to sustain public works that the national government has chosen not to support in these first two years of the administration,” Pineau told UPI.
On labor reform, he said the government is operating on the premise that Argentina’s labor system includes regulations that restrict the creation of jobs.
He said Milei will seek “greater flexibility in hiring and firing the workforce” and also to “weaken the bargaining position of the unions.”
“In Argentina, there is a tradition of a union model dating back to 1945, in which unions have considerable bargaining power, and the government will want to weaken that. It seeks to remove sector-wide collective bargaining from the unions and focus on or encourage moving toward collective bargaining at the company level,” he said.
Both analysts agree that the financial support from the U.S. Treasury — through a $20 billion swap — also helped Javier Milei win the October elections.
However, the president’s image is showing signs of wear.
According to monthly polling by CB Consultora, Milei’s approval fell to 45% in October from from 57% in December 2023, driven by falling consumption and a slowing economy.
“The scale of the government’s victory surprised everyone. What the public prioritized was stability and the decline in inflation over the past two years,” Buttié said.
He said some price stabilization, particularly in consumer goods, has brought greater calm to the public, “especially after the significant inflationary episodes of recent years.”
