Peronists Triumph in Buenos Aires: Political Repercussions for Milei

In a significant political setback for Argentine President Javier Milei, the governing La Libertad Avanza party suffered a resounding defeat in the Buenos Aires provincial elections. The center-left Peronists secured 47% of the vote, while Milei's party garnered only 33%.

The election results sent shockwaves through the financial sector, with Buenos Aires' main stock index dropping 12%, the peso plummeting by 5%, and bonds slipping by 4%. Analysts view Buenos Aires, which holds nearly 40% of Argentina's electorate, as a predictor for the upcoming mid-term elections.

This defeat has pressed Milei to potentially reconsider his alliances, especially given the Peronist party's historical stronghold in the province. While his government has reduced inflation, recent corruption allegations and protests against austerity measures have eroded his popularity. Analysts suggest forming alliances is crucial for passing his legislative agenda.

(With inputs from agencies.)