Milei’s party wins Argentina midterm vote in major comeback

President Javier Milei’s party won Argentina’s midterm vote Sunday, a result that will give the libertarian leader a strong foothold in Congress to continue pursuing aggressive free-market policies that have won praise and a financial lifeline from Donald Trump. 

Milei’s party, La Libertad Avanza, received 41% of votes nationwide with 92% of ballots counted, according to data published by Interior Minister Guillermo Francos on Sunday. It led in most of Argentina’s provinces and finished well ahead of the main opposition party, which in all of its iterations garnered about 32% of the vote, local newspaper Clarin said.

Milei said in a victory speech that he’d have the backing of 101 members of the lower house and 20 senators, without specifying if that total included members of other parties he had partnered with in the vote. The results would push Milei comfortably past the one-third of seats he needs in the 257-member lower house to protect his veto power, as well as a base to pursue legislative priorities like tax, labor and pension reforms as he seeks to overhaul the nation’s beleaguered economy. 

“Argentines demonstrated they don’t want to return to the model of failure,” a jubilant Milei said in Buenos Aires on Sunday night. “This is the most reformist Congress in the history of Argentina.”

The result came after Milei’s party suffered a landslide defeat to the Peronist opposition in a September local vote in the Buenos Aires province, an outcome that sparked a selloff of the peso amid investor fears over the president’s standing with voters. The slide led the Trump administration to extend financial support to Argentina in an effort to help both the currency and the government.

“Congratulations to President Javier Milei on his Landslide Victory in Argentina,” Trump wrote in a social media post on Monday. “He is doing a wonderful job! Our confidence in him was justified by the People of Argentina.”

It was the province of Buenos Aires, a longtime Peronist bastion home to more than a third of the country’s voters, that propelled the turnaround.

La Libertad Avanza finished one point ahead of former President Cristina Fernandez de Kirchner’s party in the province Sunday, a sharp reversal from its 14-point defeat last month.

Markets will likely rally Monday in response to the news of Milei’s resurgence. His relentless pursuit of deregulatory policies and ambitious budget cuts had won cheers from investors before the election last month. 

Argentine bonds were among the best performers in emerging markets last year but had been throttled by volatility amid the Buenos Aires results and US support package. Investors, meanwhile, headed into Sunday’s vote with little conviction to make big bets as they searched for clues on whether Milei’s economic overhaul could survive his toughest political test yet.

The result was “a very strong and conclusive performance by Milei’s LLA party,” said Alberto Ramos, managing director and head of Latin America macroeconomic research at Goldman Sachs Group Inc. “This should give his administration a fresh endowment of legitimacy and political capital which, if well used, should strengthen governability. That also bodes well for the continuation of strong US financial support.” 

While trading in the spot currency market doesn’t start until mid-morning, early indications on the crypto market showed the peso at 1,435 to the dollar — which would indicate an advance of about 4.8%. 

US Support

Milei’s win will also vindicate the extraordinary support US Treasury Secretary Scott Bessent offered Argentina. Just before the election, the US signed a $20 billion currency swap line agreement with Argentina to shore up the beleaguered peso, which is down more than 30% so far this year. 

The US also directly purchased pesos in the run-up to the vote, and is coordinating additional financial support from Wall Street banks for Milei’s administration. Trump met Milei at the White House two weeks ago, and the Argentine has emerged as one of the US leader’s most ardent supporters abroad.

As the results rolled in Sunday, billionaire investor Bill Ackman painted it as a triumph for Trump, Milei and Bessent, and “an important win for democracy, capitalism, and sanity, and a defeat for socialism.”

The backing from Washington came on top of Argentina’s $20 billion program with the International Monetary Fund that began in April.

A victory could also help turn the page politically for Milei. The president and his party have faced three corruption scandals this year, while Argentina’s slowing economy and frustration with high unemployment rates helped push Milei’s approval to the lowest level of his term ahead of the vote.

Starting Monday, Milei will have to pivot to a more pragmatic political strategy to cut deals with his political foes, whom he needs to push any lasting reforms through Congress. He’s already previewed a big cabinet shakeup is in the works, although he had also said the changes would depend on results.

Economy Minister Luis Caputo, meanwhile, assured time and again ahead of the vote that there would be no changes to the country’s currency policy come Monday, despite pleas from some investors to loosen their grip on the peso to rebuild foreign reserves. The economic team had attributed the drop in the peso to political risk.

This story was originally featured on Fortune.com