Crushing defeat in key provincial elections! On the eve of Argentina's midterm elections next month, Milei is mired in controversy over "reform and corruption."

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Argentine President Javier Milei suffered a surprising defeat in elections held in a key province.

According to the latest media reports, in the Buenos Aires provincial election held last Sunday, Argentina’s Peronist “Union for the Homeland” alliance won 47% of the votes, significantly ahead of Milei’s Liberty Advances party with 33.9%. More than 90% of the votes have been counted.

Buenos Aires Province holds a crucial position in Argentina’s political landscape. As the country’s largest province with the most voters, it accounts for nearly 40% of the national vote and has traditionally been a stronghold for Peronism.

Pre-election polls and market observers had expected this to be a close race, or at most a narrow defeat for the Milei government. However, the actual margin of defeat far exceeded expectations, surprising market participants.

Milei had originally hoped to build momentum for the October 26 nationwide midterm elections through fierce competition in this province. However, this major setback in local elections has further intensified voters' skepticism about his reform plans and corruption scandals ahead of the October midterms.

This unexpected loss is expected to impact financial markets. Alberto Ades, head of research at hedge fund NWI Management, said, when markets open on Monday, Argentine bonds and stock prices may fall, and the country’s risk index may rise.

Along with the electoral defeat, Milei’s government is facing double pressure.

In Congress, his fiscal agenda has been stalled. One of his vetoes was overturned by Congress for the first time last week, and opposition legislators are also pushing for new spending bills.

In addition, a rebate scandal involving former officials, leaked recordings, and alleged ties to Milei’s sister, Karina, continues to make headlines. Affected by this, Milei’s approval rating has fallen below 40% for the first time, indicating deepening doubts among voters about his performance in office.

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