Argentina Primaries: An Open Three Horses Race
Argentina recently held its national primary elections for the presidential race, yielding surprising results. Notably, the far-right candidate, Javier Milei, secured a significant victory by capturing 30% of the total votes. The center-right opposition coalition attained 28% of the votes, designating Patricia Bullrich as its representative for the forthcoming general election. Conversely, the ruling coalition, which garnered 27% of the votes, will be represented by Sergio Massa. Presently, all three candidates appear to have comparable prospects of advancing to the run-off stage. Sergio Massa's chances of clinching victory seem rather slim. As such, the composition of the run-off assumes paramount importance in determining whether Javier Milei or Patricia Bullrich emerges triumphant.
Figure 1: Votes in the National Primaries for Presidency (%)
Source: La Nacion
Argentina's National Primaries Election took place on August 13th, serving as a crucial preliminary step in determining the final candidates for the upcoming general election scheduled for October 22nd. Currently, three main political forces are poised to contend for the Presidential position.
The ruling leftist coalition, known as "Unión por la Patria," has put forth two candidates: Sergio Massa and Juan Grabois. The primary opposition force, "Juntos por el Cambio," presents Horacio Larreta and Patricia Bullrich as their candidates. Meanwhile, the far-right movement "Libertad Avanza" is represented solely by candidate Javier Milei.
The results of the primaries reveal a narrow margin among these three forces. Javier Milei secured approximately 30% of the votes, making his coalition the most voted. Following closely was the center-right movement "Juntos por el Cambio," with 28%. Notably, Patricia Bullrich received 17%, while Horacio Larreta garnered 11%. Consequently, Patricia Bullrich will represent the primary opposition coalition in the upcoming General elections. The ruling coalition achieved 27% of the vote, with Minister of the Economy Sergio Massa amassing the highest share within his coalition at 21%, and Juan Grabois receiving 6%.
The outcome of the primaries indicates that the general election will likely require a run-off between two candidates, with the specific contenders yet to be determined from among Javier Milei, Patricia Bullrich, and Sergio Massa. All three candidates stand on relatively even ground in terms of their chances. The composition of this run-off is anticipated to play a pivotal role in defining the ultimate candidate.
Should a run-off occur between Patricia Bullrich and Javier Milei, it is anticipated that most of Sergio Massa's supporters would gravitate toward Bullrich due to her more moderate stance. In a hypothetical run-off between Bullrich and Massa, Milei's supporters are likely to align with Bullrich. If the scenario unfolds as a face-off between Milei and Massa, it is speculated that a significant portion of the opposition's votes would shift towards Milei, potentially propelling him to the Presidential seat.
Nevertheless, Javier Milei's substantial vote count is remarkable, considering his status as an outsider candidate due to his radical views. The prospect of his victory has stirred market concerns, especially given his proposals for the dissolution of the Central Bank and the dollarization of the Argentine economy, which many deem impractical. Furthermore, his clashes with established political forces in Argentina may pose challenges to effective governance. The Argentina Peso decline around 14% on Monday while the Argentina 25 years Government Bond has declined by the same amount.
Whoever emerges victorious in the election will confront pressing economic issues, including a dwindling foreign reserve and a recession, as well as the formidable task of negotiating with the IMF regarding the existing agreement. A comprehensive stabilization plan will be imperative to curbing inflation. Given these circumstances, a scenario in which Patricia Bullrich prevails appears to be the most favorable outcome. Sergio Massa's prospects are seen as relatively limited, while the viability of the radical candidate, Javier Milei, in successfully implementing such a delicate plan remains uncertain.