As Argentina heads to the polls for its midterm elections on Sunday, October 26, 2025, the nation finds itself at a crossroads, with the fate of President Javier Milei’s ambitious economic reforms hanging in the balance. While Milei himself isn’t on the ballot, the vote for less than half of the Argentine Congress has become a referendum on his turbulent first year in office—a year marked by dramatic fiscal turnarounds, political scandals, and unprecedented foreign intervention. The stakes, both political and economic, have rarely felt higher.
It wasn’t long ago that Milei, a self-styled libertarian firebrand and close ally of former U.S. President Donald Trump, was riding high. According to the Associated Press, his government’s sweeping austerity measures delivered Argentina’s first fiscal surplus in nearly 15 years and slashed monthly inflation from a staggering 25.5% to just 2%. The peso strengthened, imported goods became more affordable, and Argentines briefly allowed themselves a sigh of relief after years of economic turmoil. Milei’s approval ratings soared, and he became a fixture on the international stage, touting his free-market vision and railing against what he called the corruption of the political elite.
But as quickly as fortunes turned up, they seemed to unravel just as fast. In February, Milei promoted a dubious memecoin on his social media channels, only for it to collapse spectacularly and leave investors nursing $250 million in losses. By August, his powerful sister faced allegations of accepting bribes from a government medicine supplier—a charge she denies. Then, in a blow to his credibility as a reformer, Milei’s leading candidate in Buenos Aires province, José Luis Espert, exited the race after admitting to receiving $200,000 from a businessman indicted in the U.S. for drug trafficking, a sum he claims was for consulting services.
Meanwhile, Milei’s decision to run political outsiders from his fledgling La Libertad Avanza party in provincial races, rather than building coalitions, alienated potential allies. When the Peronists—Argentina’s long-dominant populist party—trounced Milei’s party in Buenos Aires province, home to 40% of the population, the loss sent shockwaves through the markets. Investors dumped Argentine bonds and sold off the peso, which tumbled to a record low of 1,476 per U.S. dollar in the week leading up to the vote, as reported by Reuters. The central bank was forced to burn through its reserves in a desperate attempt to stabilize the currency.
Amid this turmoil, the United States stepped in with a rescue package of historic proportions. The U.S. Treasury, under Secretary Scott Bessent, confirmed a $20 billion swap line to Argentina’s central bank as a “bridge” to the midterms, with negotiations underway for an additional $20 billion loan from private banks. Former President Trump, never shy about flexing his influence, publicly tied further U.S. support to Milei’s political fortunes. “It just demonstrates the transactional nature of the relationship with the United States these days,” Carl Ross of asset manager GMO told Reuters. Trump even dangled the prospect of increased U.S. beef imports from Argentina to help lower American meat prices, underscoring the high-stakes, quid pro quo dynamic at play.
Yet, not everyone welcomed this lifeline. In Argentina, Trump’s comments were seized upon by the opposition Peronists, who warned voters against surrendering national dignity to foreign interests. “Compatriots, Argentina is a country too great and dignified to depend on the whims of a foreign leader,” former President Cristina Fernández de Kirchner declared in a video message from her Buenos Aires apartment, where she is serving a six-year sentence for corruption. On Wednesday, October 22, protesters gathered outside the U.S. Embassy in Buenos Aires, banging pots and burning American flags in a vivid display of anti-interventionist sentiment, as reported by the Associated Press.
The political fallout extended to Milei’s inner circle. On October 22, Gerardo Werthein, the Minister of Foreign Affairs, resigned amid mounting criticism over his handling of the U.S. aid negotiations. President Milei quickly appointed Pablo Quirino, the Secretary of Finance and a key architect of his economic strategy, as the new foreign minister. According to Estadão Conteúdo, Quirino’s mandate is clear: “open Argentina to the world” by forging new trade agreements and strengthening the country’s position in international markets. Milei praised Werthein for his role in securing “the largest bilateral agreement in the history of our country with the United States,” but signaled a pivot toward deeper integration between foreign policy and economic management.
Quirino’s appointment comes at a pivotal moment, with the legislative elections seen as a litmus test for Milei’s pro-market vision. Should his party falter, analysts warn that the adoption of further economic reforms could be jeopardized. The departure of Mariano Cúneo Libarona, the Minister of Justice, next week only adds to the sense of flux within Milei’s administration.
The midterm elections themselves are complex. Half the seats in the lower Chamber of Deputies and a third of the Senate are up for grabs. Milei’s party needs about one-third of the votes in each house to prevent overrides of his spending vetoes—a crucial safeguard for his reform agenda. Polls show a tight race between La Libertad Avanza and the Peronists, with local brokerage Max Capital telling Reuters that sovereign dollar bonds are pricing in a Peronist win by four percentage points. Anything better than that for Milei could trigger a modest market rally, but the downside risk is significant if his party underperforms.
International investors are watching closely. Argentina’s international bonds, which were star performers in 2024, have sunk into losses in 2025 as uncertainty mounts. JPMorgan analysts believe Milei’s bloc is on track to secure enough seats to defend his veto power but caution that this alone won’t guarantee deeper reforms or a reduction in Argentina’s risk premium. “Beyond the election, a sustained rally will require a credible strategy to rebuild international reserves, likely involving a significant devaluation,” Alejo Czerwonko of UBS Global Wealth Management explained to Reuters.
Meanwhile, the mood on the streets is restless. Many Argentines, having endured two years of harsh austerity, are growing impatient as wages stagnate and the economy contracts. Some question whether the sacrifices demanded by Milei’s government are being shared equally by those in power. “It was the first wake-up call when people started to ask, maybe (Milei and Karina) are asking us to make sacrifices that they’re not making themselves,” Eugenia Mitchelstein of San Andrés University told the Associated Press.
As Sunday’s vote approaches, the world is watching to see whether Milei’s high-wire act—balancing radical economic reforms, volatile markets, and fraught international alliances—can survive its first true test. The outcome will reverberate far beyond Argentina’s borders, shaping not only the country’s economic future but also the evolving relationship between populist politics and global finance.