San Francisco Frontiers - Five things to know about Argentina's pivotal midterm election

The results will determine whether Milei's budget-slashing cuts and attempts to deregulate the economy will survive. Jittery financial markets are watching very closely.

Here are five things to know about the October 26 ballot, which will choose half of the country's 257 deputies and a third of its 72 senators.

- Who loses, wins? -

In 2023, Milei upended Argentina's political landscape, winning a landslide 56 percent of the presidential vote.

However, his young party, Liberty Advances (La Libertad Avanza), did not fare as well, securing only 37 deputies and six senators.

That has allowed a hostile Congress to repeatedly block his reforms, notably the privatisation of Aerolineas Argentinas, state-run energy firm YPF, nuclear power plants, and public media.

Polls suggest Milei's party will almost certainly boost its current seat numbers, but an outright majority still seems out of reach.

Securing a third of seats (up from 15 percent today) would allow him to veto hostile legislation. "That would be a good number," he says.

- Hope is gone -

Milei can tout some successes going into Sunday's vote.

Inflation is down from 200 percent to 31 percent -- although it is likely to rise again, if the peso is allowed to devalue as markets expect.

The budget is balanced for the first time in 14 years.

But the reforms have come at a high price for many Argentines.

Over 200,000 jobs have been lost, and the economy was in recession for much of 2024.

"We're the same as two years ago, but worse," grumbles Hector Sanchez, a 62-year-old waiter. "The hope that was there is gone".

Once a Milei voter, he is now undecided. "I'd like him to succeed, but I doubt he will."

But he sees a lack of options: "The other side has nothing. And I don’t want to go back to before."

The president's lustre has also been tarnished by corruption allegations that hit his inner circle.

An economist close to Milei recently dropped out of the election over past ties to an alleged drug trafficker.

- Powerful friends -

With Milei under mounting pressure, ideological ally Donald Trump rushed to his rescue with a $40 billion financial and political bailout.

Economists warn the largesse might be a "financial Vietnam" for the United States, requiring Washington to pump in good money after bad to prop up Milei and the peso.

Argentines fear a peso devaluation or depreciation after the vote despite US intervention. And the opposition has made hay from Milei's ties with mistrusted gringos.

"Orders now come from Washington... Trump is Milei's campaign manager," said Axel Kicillof, the governor of Buenos Aires province.

- A 'Lion' tamed? -

Ahead of the vote, Milei has looked to soften his image as a norm-smashing political warrior.

Since a September regional election loss, there have been fewer insults toward opponents or journalists, more outreach to provincial governors, and a hint of empathy with references to "vulnerable" Argentines.

The man who likes to call himself "the Lion" still wants to be edgy. He recently donned his rocker leather jacket for a surreal rally-concert aimed at pleasing his hardcore base.

Will his newfound pragmatism continue after the vote?

"Milei might strike temporary deals, push a less radical reform than he wanted, just to show he delivered," predicts Gabriel Vommaro, political scientist at Conicet.

"But a full 'normalization' of Milei, or a broader coalition? I'm not sure he can, or even wants to," said Vommaro.

- Centrist challenge? -

Milei's party will run solo in some districts, and in others is allied with pro-business Republican Proposal -- not a governing partner but often a source of votes.

Facing this "pro-Milei" bloc is the Peronist opposition, in power for 17 of the past 23 years.

It is still regrouping from the shock of 2023. Former president Cristina Kirchner's star has faded -- she was convicted of corruption and ineligible to run again.

Kicillof, the 54-year-old governor of Buenos Aires province, is gaining stature ahead of the 2027 presidential race.

But both the Peronists and Milei face a new challenge in the form of a centrist federalist and province-based force that could have a solid showing.

K.Gray--SFF