Milei loses Buenos Aires election, threatening his government

Milei loses Buenos Aires by 13 points as economic plan wobbles

The Peronist movement won 47% of the vote in Buenos Aires province, home to 40% of Argentina's electoral roll, versus 34% for La Libertad Avanza and PRO. The thirteen-point margin shattered polls predicting a tie, turning provincial elections into a national verdict on Javier Milei's government. The president reacted promising self-criticism and radicalization: "If we made political mistakes, we will correct them," he said, without budging from his economic plan.

What Argentina's economic numbers say

The result is unexplainable without material deterioration. GDP per capita collapsed by 11%, according to economist Carlos Melconián. Since Milei took office, some 200,000 private jobs were lost, 180,000 state workers were fired, and around 15,000 small and medium enterprises closed. The minimum wage fell by 32%. "There is little consumption, little investment, little production, and little export," summarizes Melconián himself, who is hardly a critic of the austerity measures.

The official narrative was that sacrifice would buy prosperity. The ballot box told a different story. Anger votes punished mistreatment of pensioners and people with disabilities, plus the scandal involving Karina Milei, the president's sister and de facto co-president, over alleged bribes in drug purchases.

Peronism unites while Milei loses his narrative

Milei tried to polarize. He called for driving "the last nail into Kirschnerism's coffin," but the effect was opposite: a party with over seventy years of history shelved internal disputes and appeared united. Buenos Aires Governor Axel Kicillof emerged as the big winner and is already shaping up as a presidential candidate for 2027. "It is a healing joy; we came to put a brake on this Government," he declared.

Former President Cristina Fernández de Kirchner, under house arrest, celebrated from her balcony and attacked the government online: "Pointing fingers and stigmatizing people with disabilities while your sister takes a 3% cut from their medication is lethal."

The dollar, IMF, and risk of currency run

Immediate concern is financial. The Central Bank fails to contain the dollar, and the $12 billion IMF loan has evaporated trying to prevent the currency from soaring. Markets watch rates with broker-like precision: the dollar at 1,450 and an IMF band capped at 1,500. A currency shock would hit the economic plan directly.

Some argue current policies have short legs: spending cuts, anemic economy, hospitals without resources, and hungry pensioners, while the state borrows to subsidize dollar purchases. In this scenario, the incentive is not investing in Argentina but exploiting the anomaly.

October's political bill

The calendar offers no respite. National parliamentary elections on October 26 could repeat the correction. Observers note Milei's party didn't exist in previous elections and now loses in almost all provinces, except Chaco and Jujuy, ranking third or fourth in several districts.

The underlying debate is whether the "charm" of Milei among disadvantaged voters who backed him in 2023 has peaked. Youth attracted by his rhetoric either stayed home or chose the opposition. The idea of a "cultural change" favoring the anarcho-liberal program crashed into reality at the polls.

An unprecedented adjustment without safety net

The most repeated argument is that you cannot ask a people for historic effort while the government lives in luxury: trips, internal fights between president and vice-president, corruption cases, and a sister with no elected office making decisions. Preached austerity isn't practiced at home.

The uncomfortable question remains: if the adjustment was inevitable, why was it applied cruelly and without a supporting narrative? With the dollar tense and October looming, Milei's governability hangs by a thread he insists on tightening.