President Javier Milei of Argentina faces a critical test. On Sunday, the country holds a legislative election that has become a momentous tipping point for his presidency — and gained a bigger spotlight after President Trump tied a U.S. financial lifeline for Argentina to Mr. Milei’s electoral success.
“If he doesn’t win, we’re gone,” Mr. Trump said as he welcomed Mr. Milei at the White House this month, and called Sunday’s vote “a very big election being watched by the world.”
The stakes are high for Mr. Milei, a self-described anarcho-capitalist economist who rose to power as a flamboyant outsider promising to transform Argentina’s chronic economic woes. The vote, which comes nearly two years after his election as president, will determine whether Argentines still support his cost-cutting, pro-market experiment.
Mr. Milei has managed to reduce Argentina’s once-runaway inflation and achieved a budget surplus, but his austerity measures have also inflicted acute pain on wide swaths of the population. The hardships collided with a collapse in the value of the peso, the local currency, and corruption scandals involving Mr. Milei’s inner circle.
Mr. Trump’s recent endorsement has also yielded mixed results. While the announcement of a $20 billion currency swap stopped the peso’s collapse, Mr. Trump’s comments on the election were criticized by many Argentines as foreign interference.
The government tried to assure Argentines that Mr. Trump would not walk away if Mr. Milei’s party falters in the election, but the voters’ ultimate reaction will only become clear after the polls close on Sunday night.
What is at stake?
Midterm elections rarely capture international attention. But this one is widely seen as key for the future of an economic experiment that is being watched closely beyond Argentina.
The vote will decide half of Argentina’s lower house of Congress and a third of the Senate. Mr. Milei needs enough legislative support to continue carrying out his agenda.
A weak showing by Mr. Milei would make it harder for him to pass legislation in Congress, but also to reassure financial markets about his political viability. Some international investors may hold off investing in the country, undermining Argentina’s economic prospects.
The Trump administration has also tied the United States to Argentina and Mr. Milei’s fortunes. A rare Latin American leader who has been emphatic in his fondness for Mr. Trump and support for the MAGA movement, Mr. Milei’s political success is viewed by the Trump administration as a way to bolster American influence in South America and counter China’s push into the region.
For pro-market observers, a poor showing by Mr. Milei would threaten an agenda of deregulation and budget cuts they see as beneficial to Argentina and a template for economic development.
“These are critical elections, not just for Argentina, but also for the region and the world,” said Ian Vasquez, the vice president for international studies at the Cato Institute, a libertarian research institute.
The International Monetary Fund, which has bet on Mr. Milei’s project with its own $20 billion bailout, will be looking to see whether Mr. Milei has the political capital to carry out his economic plans.
“The economy has the best chance in two decades to get on a path of positive growth,” said Martin Mühleisen, a former I.M.F. official and senior fellow at The Atlantic Council.
How is the Argentina’s economy doing?
It depends where you look.
Mr. Milei has won international praise for curbing inflation, which fell from 160 percent annually when he took office to about 30 percent this year. Lower inflation has helped reduce poverty and Mr. Milei’s fiscal austerity has appeased international lenders.
Yet while a segment of the population took advantage of a strong peso to buy cars and appliances and travel abroad, many others have struggled to make ends meet.
Public-sector salaries have failed to keep up with prices, and recent surveys show a majority of Argentines don’t earn enough to cover their monthly expenses. After several months of growth last year, Argentina’s economy has largely stalled and the country has lost more than 100,000 registered jobs since Mr. Milei was sworn in.
Mr. Milei has blamed the recent economic decline on the political opposition in the legislature, accusing them of spooking investors by rejecting spending cuts. Critics blamed the government for failing to rebuild foreign currency reserves, leaving the economy vulnerable to sudden swings in investor sentiment.
How is Milei faring?
Argentines had continued to support Mr. Milei, even as his policies caused economic pain, surveys showed.
But in recent months, they have started to show some fatigue.
Bribery allegations embroiling those close to Mr. Milei have been particularly damaging, since he had come to power railing against corrupt politicians. Mr. Milei’s powerful sister and another close aide have been accused of profiting from kickbacks by pharmaceutical companies. They have denied the accusations.
The scandals, experts say, have made it harder for voters to stomach the government’s austerity measures.
“These hits affected his narrative,” said Roberto Nolazco, a political scientist at Argentina’s Catholic University. “Voters started to say: all of this effort for what? So that the president’s sister can steal the money?”
How is the U.S. involved?
The United States, in an unconventional move, promised to buy billions of dollars worth of Argentine pesos to support what Mr. Trump called “a good financial philosophy.”
The terms and conditions of the U.S. economic support package have not been announced, but it provided a critical lifeline for Mr. Milei. The U.S. Treasury continued to snap up hundreds of millions of pesos.
Mr. Trump said last week that U.S. help was conditional on Mr. Milei’s victory in the midterms, adding that he expected his statements to boost his ally’s popularity. Instead, they caused nervousness in the markets and criticism by the Argentine opposition over what they portrayed as Mr. Milei allowing the United States to dictate internal affairs.
Argentine officials sought to backtrack on Mr. Trump’s statement, saying that the United States would continue to support Argentina as long as Mr. Milei was the president.
The Trump administration’s financial bet on Argentina could also backfire and cost the United States money given that Argentina’s economy has needed more than 20 bailouts.
What next?
Polls open at 8 a.m. local time and close at 6 p.m. on Sunday. Results will be available online, with the Interior Ministry expected to publish the first results around 9 p.m.
Because the election is to decide legislative seats, the results may be harder to interpret, with Mr. Milei and his supporters no doubt hoping to portray the results as a victory.
A clear objective for Mr. Milei’s party and his allies is to win enough seats in the lower house to prevent his vetoes of legislation from being overridden.
Despite Mr. Milei’s party having only a small number of legislative seats in the first half of his term, Mr. Milei initially managed to get Congress to approve many of his proposals. More recently, lawmakers have pushed back against several of his measures, even overturning his vetoes rejecting increased spending for universities and health care.
Lacking congressional support, Mr. Milei has relied heavily on presidential decrees, but lawmakers are seeking to limit that power.
Mr. Milei wants to overhaul labor laws and make contracts more flexible, deepen cuts to the federal government, ease regulations, cut taxes and streamline bureaucratic procedures to encourage economic activity and boost employment and salaries.
Asked about the day-to-day struggles of some of his constituents, Mr. Milei acknowledged that Argentina was not “Switzerland,” but he insisted that prosperity lay ahead.
“We’re halfway there,” Mr. Milei said at a rally this week. “And that’s why I’m asking you not to let up, because this time the effort is worth it.”
Daniel Politi contributed reporting from Buenos Aires.
Emma Bubola is a Times reporter based in Rome.
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