Argentine Economy Minister and Right-Wing Populist Look to Runoff

Argentina’s economy minister and the anti-establishment upstart he faces in a presidential runoff next month began competing Monday to shore up the moderate voters they need. Economy Minister Sergio Massa earned almost seven points more than chainsaw-wielding economist and freshman lawmaker Javier Milei in Sunday’s vote. Most polls had shown Massa slightly trailing, as voters had been expected to punish him for triple-digit inflation that has eaten away at purchasing power and boosted poverty.[...]

Sovereign bonds plunged Monday and there was a selloff in Argentine equities as the market predicted that Massa’s first-round surprise means the government has little incentive to correct any of the economy’s imbalances for now. In the run-up to the vote, Massa boosted welfare programs and implemented tax cuts that benefited almost all registered workers, going against calls from the International Monetary Fund for austerity and removal of subsidies.

Massa “was able to build over the last two months through some tax holidays and other giveaways that could be fairly deemed populist,” said Brian Winter, a longtime Argentina expert and vice president of the New York-based Council of the Americas. “It’s going to be really interesting to hear what he says in the next few weeks, because he will need to win over some more moderate voters in order to win.”

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