Javier Milei won Argentina’s presidential runoff on 19 November 2023 against Sergio Massa. The result, the economic programme he has announced, the market reaction and what it means for Spanish companies.
On Sunday 19 November 2023 Javier Milei, leader of La Libertad Avanza, won the runoff of Argentina’s presidential election against the Economy Minister and ruling-coalition candidate, Sergio Massa (Union for the Homeland). With almost all polling stations counted, the provisional tally gave Milei 55.7% of the vote and Massa 44.3%, a lead of more than 11 points and of close to three million votes. Massa conceded before the count was complete.
The result
Turnout was around 76%, slightly lower than in the October first round, when it was 77%. Milei won 21 of the country’s 24 districts; Massa prevailed only in Buenos Aires province, Formosa and Santiago del Estero. Compared with the first round, Milei added about 6.4 million votes. The figures are provisional: the final count is the job of the electoral courts and may vary slightly.
The new president takes office on 10 December. His party is a minority in both houses of Congress, so he will need support from other forces, such as Together for Change, to pass legislation.
Programme and markets
Argentina arrives at this change of government with triple-digit annual inflation (142.7% in October), a currency with several exchange rates and around 40% of the population in poverty. In the campaign, Milei proposed drastic cuts in public spending to balance the books, liberalising the economy, privatising state companies, closing the central bank and dollarising. As of 20 November he had not yet announced his economy minister or the timetable for the measures.
Local markets were closed on Monday 20 for a holiday, so the first reaction came from abroad. In New York, Argentine stocks listed there soared: according to Bloomberg, the YPF ADR rose 40%, its best session since it began trading in 1993; Banco Macro rose 20%; Grupo Financiero Galicia 17%; and the Global X MSCI Argentina exchange-traded fund 12%, a record. Sovereign dollar bonds maturing in 2030, 2041 and 2046 rose by at least 1.9 cents. On local crypto platforms, the peso fell on Sunday to about 990 per dollar, nearly 7% weaker than on Friday.
Analysts urged caution: Milei’s party has few seats, the programme carries execution risks and the transition until 10 December still depends on the outgoing government, which can influence the currency, reserves and spending. Argentine bonds had lost more than 40% of their value since the 2020 restructuring.
Spanish companies
More than a hundred Spanish companies operate in Argentina, and Spain is the country’s second-largest foreign investor, after the United States. Among the most visible are Banco Santander (Santander Río), BBVA (BBVA Argentina), Telefónica (Movistar), Dia, Meliá, Abertis, Prosegur and Cabify. For them, the decisive variables will be the exchange-rate regime, restrictions on capital outflows and legal certainty; ICEX cites a changeable, volatile regulatory framework as a brake on investment, and the expropriation of YPF from Repsol in 2012 remains in investors’ memory.
Milei’s privatisation plans could open up opportunities in distribution, infrastructure and transport; at the same time, volatility and uncertainty over the specific programme make its effect hard to predict. Anyone with exposure to Argentina, through direct investment, funds or subsidiaries, may want to review how the exchange rate and capital restrictions affect them. Ask your adviser how it applies to your case. The ballot box has given a clear majority; the programme, support in Congress and the exchange rate will tell the rest.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
