Argentina’s economy minister Sergio Massa seeks broad coalition after first-round election win

Argentina’s Peronist economy minister Sergio Massa has cast himself as a national unity candidate to woo centrist voters after pulling off a surprise win over libertarian challenger Javier Milei in the first round of the presidential election, held amid growing economic turmoil.

With almost all votes counted Mr Massa, from the country’s centre-left ruling coalition, had won 36.7 per cent, against 30 per cent for Mr Milei and his upstart La Libertad Avanza party (LLA). Mr Massa and Mr Milei will fight a run-off on November 19th.

Few had believed that after presiding over triple-digit inflation and growing poverty, Mr Massa could engineer an election victory, with the Peronists coming third in August’s nationwide primaries. But the political veteran ran an effective campaign, projecting moderation and stirring fear among voters over Mr Milei’s radical plans to shrink the state.

Sunday night’s result was at odds with almost all the opinion polls, which had shown a consistent lead for Mr Milei, a mop-haired economist and television personality who finished first in the primary in August.

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Shila Vilker, director of Trespuntozero, one of only a few pollsters to predict a Massa win, said the Peronist now had a better shot at the presidency than Mr Milei, who faced “serious problems to seduce those who two minutes ago were his enemies, while Massa has been talking about national unity for a while”.

Markets reacted badly to Mr Massa’s victory, with investors fretting that the economy minister would continue to increase public spending regardless of the parlous state of the economy to secure a second-round victory, and that Mr Milei’s mandate for sweeping austerity if he won would be limited.

Patricia Bullrich, the candidate for the mainstream centre-right opposition bloc Juntos por el Cambio (JxC), preferred by many investors and business leaders, was eliminated after receiving just 23.8 per cent of the vote. Once the favourite, JxC was hurt by a divisive primary and a campaign that targeted law and order rather than the economy.

In his victory speech, Mr Massa reiterated a campaign pledge to form a unity government with different political parties, vowing to end the divide between Peronists and non-Peronists that has dominated Argentine politics for 40 years. “I’m someone who believes in dialogue and consensus,” he said.

Mr Milei recognised the election results and called on “everyone who wants a change” in Argentina to defeat Peronism. “I’m ready to have a clean slate ... beyond all our differences we have to understand that we have a criminal enemy against us.”

A pragmatic dealmaker from the right of the Peronist movement, Mr Massa has overseen a rapidly worsening economic climate under outgoing president Alberto Fernández over the past 14 months. Inflation hit 138 per cent a year in September while Argentina’s foreign currency reserves have been drained to support the plunging peso.

Despite the deteriorating economy, Mr Massa increased welfare spending and announced tax breaks during the campaign, contrasting his determination to maintain social safety nets with Mr Milei’s pledge to slash the number of government ministries.

Mr Milei’s insurgent bid for the presidency has been fuelled by widespread frustration in Argentina after several decades of economic woes.

He ran a furious campaign against mismanagement and corruption by Argentina’s political establishment while promising to slash spending by up to 15 per cent of gross domestic product and to adopt the US currency. He also opposed abortion, denied climate change and attacked the Argentine-born Pope Francis, a former Buenos Aires archbishop, as a “filthy leftist” and an “imbecile”.

Neither of next month’s second-round contenders will have a majority in Argentina’s congress. Projections from the congressional vote showed the Peronists will have 108 seats in the lower house, 21 short of a majority, with JxC at 93, Mr Milei’s party at 37 and the remainder going to small blocs. In the Senate, where a third of the 72 seats were up for grabs, the Peronists will have 34 seats, JxC 24 and LLA eight. – Copyright The Financial Times Limited 2023