Argentina’s General Election Results Set Stage for Run-Off Vote
Argentina’s ruling Peronist coalition exceeded expectations in the general election, setting the stage for a run-off vote on November 19. The contenders for the run-off are Economy Minister Sergio Massa and far-right radical Javier Milei. Analysts have shared their reactions to the election results.
Investors Focus on Policy Announcements
Sergio Armella from Goldman Sachs in New York emphasizes that investors will closely watch the policy announcements from the two candidates advancing to the second round. The policy direction of Mr. Massa, considering his role as Finance Minister, will be of particular interest. Policy missteps are a concern for Argentina, given its current economic challenges such as high inflation, currency pressures, and negative international reserves. For Mr. Milei, investors will be keen to know potential cabinet positions, like the finance minister, in the event of his victory.
Transference of Votes and Macroeconomic Challenges
Diego W. Pereira from JPMorgan in New York points out that the transfer of votes between different political forces, especially the support of Patricia Bullrich and Juan Schiaretti, will be crucial in the run-off. The government is expected to make efforts to avoid a disorderly devaluation of the currency and maintain competitiveness. The macroeconomic imbalances and corruption scandals have not significantly impacted the performance of the incumbent, highlighting the importance of the vote transfer.
Prospects for Change and Economic Uncertainty
Mariano Machado, Principal Americas Analyst at Verisk Maplecroft in Malaga, highlights the potential for pro-change voters to shift their support to Milei in order to oust the Kirchnerism movement from power. The next few weeks will be critical economically, as Milei, with his push for dollarization, and Massa, with his monetary policies, could lead to significant macroeconomic consequences. The combination of these factors may drive macroeconomic variables to the edge.
The results of Argentina’s general election have set the stage for an intriguing run-off vote. Investors, citizens, and analysts are closely watching the candidates’ policy announcements and the potential impact on the country’s economy. The transfer of votes and the uncertainty surrounding macroeconomic challenges add further complexity to the situation. As the run-off approaches, the outcome remains uncertain, but its implications for Argentina’s future are significant.
