Buenos Aires, Argentina – Anticipation and apprehension are intermingling regarding the performance of President Javier Milei's La Libertad Avanza (LLA) party in Argentina's midterm elections, scheduled for October 26, 2025. These elections will serve as a crucial test, as President Milei's policies, symbolized by his "chainsaw" and driving radical economic reforms that have significantly impacted Argentine society, will face the judgment of the electorate.
Milei Government's Shock Therapy and Its Outcomes
Since taking office in December 2023, President Milei has pursued unprecedented austerity measures and market liberalization reforms to curb rampant inflation. Drastic actions, including plans to close the central bank, downsize the government, halt public works, and cut subsidies, were announced consecutively, acting as a significant shock therapy for the Argentine economy.
Initially, widespread public backlash and chaos were intense. However, judging solely by indicators up to the first quarter of 2025, some positive results appear to have been achieved. Notably, the monthly inflation rate has significantly dropped from 25.5% at the time of his inauguration to a range of 2-3%. Furthermore, Argentina achieved a fiscal surplus for the first time in 14 years in 2024, indicating an improving trend in macroeconomic indicators. These achievements have garnered positive evaluations, with the International Monetary Fund (IMF) commending the "impressive initial results."
Based on these improved economic indicators, the Milei government expresses confidence in economic recovery, citing the World Bank's forecast that Argentina's economy will achieve 5% growth in 2025, rebounding from a 2.8% contraction in 2024. Investors are also reportedly monitoring Argentina's market-friendly policies, such as the move to lift exchange controls, and seeking investment opportunities.
The Shadow of Reform: Deepening Social Costs
However, these economic achievements have come at a substantial social cost. The Milei government's austerity policies have led to restrictions on pension and wage increases, large-scale public sector layoffs, and reductions in public services, making life more difficult for low-income and middle-class citizens. The poverty rate in the first half of 2024 reached 52.9%, marking the highest level since 2003 and representing an 11.2 percentage point increase compared to the second half of 2023. Even with a slowdown in the overall inflation rate, the prices of medicines and food continue to rise significantly, meaning that the perceived cost of living for ordinary citizens remains high.
This deterioration in socio-economic conditions has amplified public discontent with the Milei administration. Labor unions and civil society organizations, in particular, are strongly opposing the government's reform policies, organizing large-scale protests and strikes. They criticize Milei's "shock therapy" for exacerbating social inequality and undermining essential social safety nets.
Legislative Landscape and Political Hurdles
President Milei's political foundation remains fragile. His La Libertad Avanza (LLA) party is merely a minority in Congress. Currently, opposition parties, including the Unión por la Patria (Union for the Homeland) coalition, hold 46% of the seats in the Senate and 39% in the Chamber of Deputies, while the LLA occupies only 10% of the Senate and 15% of the Chamber of Deputies. Within this unfavorable legislative structure, President Milei has primarily relied on decrees and executive powers to push through his reforms.
However, this approach has drawn strong opposition from rival parties and is a major reason for the difficulty in passing legislation. Indeed, the Milei government's key reform bills have repeatedly been stalled or amended in Congress. Recently, an attempt to appoint Supreme Court justices by presidential decree sparked fierce backlash from the opposition. Such political confrontation could weaken the executive branch's momentum for governing and slow down the pace of reforms.
Key Issues and Outlook for the 2025 Midterm Elections
The October 2025 midterm elections represent a critical opportunity for President Milei to secure parliamentary support and gain momentum for his administration. In this election, one-third of the Senate seats and half of the Chamber of Deputies seats will be renewed. If the LLA fails to secure a significant number of seats in Congress, President Milei's ability to push through reforms during the remainder of his term could become even more challenging.
The main issues at stake in these midterm elections are as follows:
Evaluation of Economic Reforms: Voters may positively evaluate the Milei government's economic reform achievements, particularly in curbing inflation and ensuring fiscal soundness. However, they may hold a critical view of the accompanying social costs, such as increased poverty rates and reduced real incomes. Whether the improvement in economic indicators has brought about tangible changes in the lives of ordinary citizens will be a crucial criterion for judgment.
Direction of Social Policies: The Milei government's social policies, including welfare cuts and privatization of public services, have met strong resistance. Public dissatisfaction with social policies related to education, healthcare, and pensions could significantly influence the election results.
Political Stability: Persistent conflicts with Congress and strong opposition oversight cause instability in governance. Voters will ponder which political force to empower for stable governance.
Pace of Dollarization Policy: President Milei ultimately aims to dollarize the Argentine economy, but he has adopted a cautious stance, stating it will not be realized before the midterm elections. Dollarization is a sensitive issue with stark divisions of opinion, and how the government's future roadmap on this issue will be perceived by voters remains to be seen.
Negotiations with the IMF: Argentina is pursuing a new agreement with the IMF, a process that requires congressional support. The outcome of the midterm elections could also influence the progress of negotiations with the IMF.
Currently, President Milei's approval ratings have shown some decline from their high levels at the beginning of his term, but he still maintains significant support. In particular, expectations for inflation mitigation continue to be a factor in voter support. However, with accumulated social discontent and strengthening opposition oversight, approval ratings remain highly volatile.
Alignment of Stars, or Dispersal?
The 2025 Argentine midterm elections will be a critical turning point determining the direction of President Javier Milei's administration for the remainder of his term. If his radical economic reforms successfully take root and a consensus forms that the social costs are bearable, the La Libertad Avanza party could secure more seats in Congress and strengthen its governance momentum. This would signify a situation where the "stars align."
However, if economic indicator improvements do not directly translate into tangible benefits for ordinary citizens and only exacerbate social discontent, voters may choose to deliver a judgment against the Milei government. In this scenario, with an increase in opposition seats, President Milei's reform efforts would become even more challenging, and his political "stars could scatter."
In the remaining period, President Milei will need to consolidate public support based on economic achievements, while simultaneously working to alleviate social costs and enhance communication with Congress. The eyes of the world are fixed on Argentina's midterm elections on October 26, anticipating what outcomes his unique leadership and the choices of the Argentine people will bring.
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