First cracks appear in Milei's hold on power in Argentina

In his first major electoral trial since taking office in October 2023, Argentina’s right-wing libertarian president, Javier Milei, has seen his party suffer a heavy defeat. The outcome stands as a forceful reminder of the remarkable staying power of Peronism – the movement named after former president Juan Perón. Its ideology centers on the state playing a central role in the economy through progressive policies to secure social justice – the opposite of Milei’s mission to slash the size of government.

Provincial elections in Buenos Aires on September 7 left Milei’s Liberty Advances with 34% of the vote, while the different Peronist factions (running under the Homeland Force Front) secured 47.4%. Though technically a provincial contest, the race carried national weight, according to reporting by El Pais. Milei himself cast it as a life-or-death battle between his libertarian project and Peronism’s redistributive left-wing economics.

Since 2003, the movement has often been known as Kirchnerism for its ties to the political couple Néstor Kirchner and his wife, Cristina Fernández de Kirchner, who both have served in the office of the president at some point. Although barred from running for office due to corruption charges, Fernández de Kirchner continues to loom large over Argentina’s progressive left. Before the Buenos Aires vote, Milei claimed it was a chance for citizens to “put the final nail in the coffin of Kirchnerism” by endorsing his own liberal reforms.

Kirchnerism has shaped the left-wing identity of the Peronist party since 2003, and Peronist values remain deeply ingrained in Argentine society. The recent election was Milei’s first litmus test since taking his “chainsaw” to the state with sweeping austerity measures. The 13-point margin was a resounding rejection of his program in Argentina’s most populous province, home to 40% of the population.

And while Buenos Aires province has long been a Peronist stronghold, in 2023 Milei came within 1.5% of winning it, signalling how far his anti-establishment message had spread. But less than two years later, the political pendulum appears to be swinging back to the Left.

So what does this setback mean for the president ahead of October’s mid-term legislative elections?

According to an article published by The Conversation, it first of all signals that the political capital Milei amassed in 2023 has eroded quickly. On the campaign trail, he tapped into widespread frustration with the political establishment. Back then, he benefitted from being an outsider with radical proposals that might – just might – succeed.

Now, nearly two years on, his fiery rhetoric has translated into policies with direct consequences for everyday life.

Milei has succeeded in taming inflation. Monthly price rises have slowed to about 2% from the more than 7% recorded in 2022. But in June 2025, unemployment climbed to 7.9% – the highest since 2021. Polls show over half of Argentine workers fear losing their jobs. Cuts to public spending on education, healthcare, social care and infrastructure have all driven unemployment higher.

Real wages are sliding as salaries fail to keep up with prices and the publication notes that Milei’s lifting of currency controls has pushed the peso sharply higher against the dollar.

That appreciation is raising the cost of living in dollar terms, a blow for Argentines who for years have saved in US currency to shield themselves from peso volatility.

Argentina is now one of the priciest countries in Latin America – while wages remain among the lowest. As a result, 63.7% of Argentines report struggling more to make it through the month financially.

Second, Milei’s ambitions to grow his minority bloc in congress – vital for advancing his free-market project – have been badly weakened. Opposition lawmakers already watered down his initial reform package, and without more seats in the senate and lower house, further liberalization will be blocked.

The Peronists remain the largest bloc in congress, meaning Milei must win big in the mid-terms to balance their influence.

Analysts argue that this defeat should push Milei to reconsider his strategy, yet the paper argues the president shows no sign of changing course, instead pledging to double down on austerity.

By Nazrin Sadigova