Milei’s Disapproval Rating Hits New High as Midterm Lead Shrinks

Argentine President Javier Milei's disapproval rating rose to a new high of 53.7% in September, marking a third consecutive monthly increase amidst bribery allegations involving his sister. Concurrently, his party, La Libertad Avanza, saw its projected lead for the October midterm elections halved since July, according to a LatAm Pulse/AtlasIntel poll, indicating growing political headwinds and potential legislative challenges for his administration despite maintaining a lead.

Analysis

Argentine President Javier Milei's political capital is showing signs of erosion, presenting a key risk for investors betting on his reform agenda. His disapproval rating climbed for a third consecutive month to a new high of 53.7% in September, with support at 42.4%, according to a LatAm Pulse poll. This deterioration in public perception, linked to bribery allegations involving his sister, is directly impacting the electoral outlook. The projected lead for his La Libertad Avanza party in the crucial October midterms has been halved since July. While the party is still expected to win, a narrowing victory margin could weaken its legislative power, potentially impeding the passage of market-oriented reforms and creating political gridlock that jeopardizes the administration's economic stabilization plans.

Key Decisions for Investors

• Investors with exposure to Argentine assets should closely monitor polling data leading up to the October midterms, as further erosion in La Libertad Avanza's lead could signal increased legislative risk and potential for market volatility.
• The narrowing poll numbers suggest a higher probability of a contested legislative environment, warranting a re-evaluation of the execution risk associated with Milei's pro-market reforms.
• It may be prudent to consider hedging strategies for Argentine positions, as a weaker-than-expected midterm result could trigger a negative repricing of assets sensitive to the political reform narrative.