President Mauricio Macri said on Monday he will seek more sweeping reforms for Argentina after his governing coalition scored a resounding victory in congressional elections. Macri's center-right coalition remains a minority in both houses of Congress.
But the Let's Change coalition won in 13 out 23 provinces as well as the Argentine capital in Sunday's voting and will have the biggest bloc in Congress.
Macri told reporters Argentines should expect reforms in tax, education and labor, without providing details. The conservative leader has been pushing a free-market reform agenda to overhaul Argentina's struggling economy. But his ordering of layoffs of state workers, the elimination of tariffs aimed at protecting local industry, and hikes in utility rates has fueled labor unrest.
We need to make many reforms, Macri said. We've done some already ... but looking ahead, there's still a lot to be done.
The elections were largely seen as a referendum on Macri's two years in office, but they were also watched as a test of power for his left-leaning predecessor, ex president Cristina Fernandez. She won a Senate seat, but came in a distant second in her multi-seat district, and analysts said that had diminished her chances of a presidential run in 2019.
Cristina Fernandez is fighting corruption allegations stemming from her 2007-2015 presidency, and a Senate seat grants her immunity from prosecution.
The market has taken this election very well, said Marcelo Trovato, head of Buenos Aires-based Pronostico Bursatil consultancy.
Twenty-four of 72 Senate seats were at stake as were 127 seats in the 257-member lower Chamber of Deputies. The electoral result paves the way for Macri to seek re-election in 2019 as he faces a divided opposition without a clear leader.
For Macri, the challenge is 100% the economy and the social situations, where the government has few achievements and must now face structural reforms, said analyst Patricio Giusto of Diagnostico Politico consultancy.
As a result of the election results Argentina's stocks, bonds and currency jumped on Monday. Investors expect that momentum will help it pass its 2018 budget, which aims to cut the fiscal deficit by one percentage point to 3.2% of GDP, along with tax, labor and capital markets reforms.
A very solid electoral performance by President Macri, which should endow the administration with a stronger mandate to purse his reformist agenda, Goldman Sachs economist Alberto Ramos wrote in a report.
Argentina's benchmark Merval index rose 1.9% to new all-time highs, while the peso firmed 0.9%. Dollar bonds jumped 1.8%