Milei's Electoral Setback: End of Radical Economic Plan?

In his first real electoral test since sweeping to power in October 2023, the party of Argentina's right-wing populist president, Javier Milei, has suffered a landslide defeat. The result can be read as an emphatic reminder of the remarkable endurance in Argentina of Peronism - the movement named after former president Juan Perón.

The ideology is grounded in the state taking a leading role in the economy through progressive policies to deliver social justice - the antithesis of Milei's mission to cut the state down to size.

Elections in the province of Buenos Aires on September 7 left Milei's Liberty Advances party on 34% of the vote with the various factions of the Peronist party (under the banner of Homeland Force Front) on 47.4% .

While it was essentially a provincial election, the contest took on a symbolism nationally. Milei himself had framed it as a life-or-death battle between his libertarian movement and the left-wing wealth redistrubutive politics of Peronism.

Since 2003, the movement has often been called Kirchnerism because of its association with Néstor Kirchner and his wife Cristina Fernández de Kirchner. Both were once president of the country representing the Peronist party.

Despite being barred from seeking public office due to corruption charges , Fernández de Kirchner continues to dominate left-wing progressive politics in Argentina. Before the vote in Buenos Aires province, Milei argued that it was a chance for voters to put the final nail in the coffin of Kirchnerism by backing his liberal policies.

This idea of putting an end to Kirchnerism is an interesting one. Speaking with an Argentinian academic friend after Milei's 2023 victory - the biggest vote margin since the return to democracy in 1983 - my friend said: "Kirchnerismo is dead". In his eyes, the scale of the defeat meant that politically it could not come back from it.

I disagreed, because social justice and wealth redistribution underpin Kirchnerist progressive policies. This is certainly polarising, but it maintains significant support. Kirchnerism has been the left-wing identity of the Peronist party since 2003, and the Peronist ideology is deeply embedded in Argentinian society.

The recent vote was Milei's first litmus test since taking his "chainsaw" to the Argentinian state through his programme of deep austerity. The 13 percentage point loss was a clear rejection of his policies in the most populous province, which accounts for 40% of the Argentinian population.

And while Buenos Aires province is traditionally a Peronist stronghold, in 2023 Milei came within 1.5% of taking it , showing that his anti-establishment appeal had gained widespread support. But after less than two years in office, the political pendulum looks to be swinging back to the Left.

Página 12, a left-wing Kircherist newspaper, summed up this idea of the battle between two social and economic visions. Its headline , "Peronism had defeated the austerity and hunger of Milei", pointed to the extreme spending cuts for which he is now infamous.

But what does this defeat mean for the president ahead of Argentina's October mid-term legislative elections?

First, it suggests the political capital that Milei held in 2023 has quickly eroded. When campaigning, Milei took advantage of disillusionment with the political status quo . Then, he had the advantage of being a political outsider with radical ideas that could, perhaps, work.

Now, for nearly two years his rhetoric has shaped policies that directly impact the lives and livelihoods of citizens.

Milei's policies have managed to tame inflation. The level of rampant monthly price rises has been brought down to around 2% from the more than 7% seen in 2022. But this figure is of little comfort to many for whom his policies, such as freezing pensions , disability benefits and wages below inflation and cutting energy and transport subsidies, has made lives much harder.

In June 2025, unemployment figures reached 7.9% - the highest level since 2021. Surveys show that more than 50% of Argentine workers fear losing their jobs . Milei's cuts to state spending on education, social care, healthcare and infrastructure have all contributed to the unemployment figures.

Real wages are being eroded as salaries fail to keep pace with inflation. And Milei's removal of currency controls has meant that the Argentine peso has appreciated significantly against the dollar.

This is pushing up the cost of living in dollar terms, which is bad news for Argentinians. For years, many have saved in dollars to avoid the plummeting value of the peso.

Argentina is now one of the most expensive countries in Latin America - with some of the lowest salaries. All of this means that 63.7% of Argentinians are finding it more difficult to make it to the end of the month financially.

Political headwinds

Second, Milei's hopes of expanding his minority in the country's congress, in order to deepen his project of economic liberalism, have taken a big hit. Opposition politicians watered down his package of economic reforms, so gaining influence in the senate and chamber of deputies is essential if he is to go further.

The Peronists are the largest bloc in the country's congress , so Milei must make significant gains in the mid-terms to counter this.

Many political commentators are suggesting that this defeat should be a point of reflection, leading Milei to change course. The president has no such plans for now though, and instead has vowed to double down on austerity.

But herein lies the problem. Milei promised that his radical policies were the answer to Argentina's longstanding economic problems. But while making substantial progress in his agenda - with strong support from the IMF - his policies to tame inflation, balance the budget, and to deliver stability and growth are not yet being felt by Argentinians.

And reports of corruption against his sister Karina Milei (also secretary-general of his presidency) have rocked this anti-establishment president. This is the man who promised to fight the corruption .

It has been a tumultuous few weeks for the Argentine president. But does it spell the beginning of the end for Milei's radical economic policies? The extent to which the Buenos Aires province is a barometer for national sentiment will become clear on October 26.

Matt Barlow does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.