The International Monetary Fund has maintained its public support for Argentina's economic programme despite President Javier Milei's significant electoral defeat in Buenos Aires province. Milei’s La Libertad Avanza party secured only 34% of the vote compared to 47% for the centre-left Fuerza Patria coalition.

"We support their commitment to ensure the sustainability of the programme's FX and monetary framework, as well as their continued adherence to the fiscal anchor and comprehensive deregulation agenda," IMF spokeswoman Julie Kozack stated on X. She added that IMF staff remain "closely engaged with the Argentine authorities as they implement their programme to consolidate stability and improve the country's growth prospects."

The backing comes months after Argentina signed a $20bn loan agreement with the IMF in April, alongside partial currency control liberalisation and implementation of a banded floating exchange rate regime. Under this system, the Central Bank can only intervene to defend the peso when the exchange rate reaches predetermined levels.

Milei confirmed on X that he would continue pursuing austerity measures despite public dissatisfaction reflected in the election results. The president also cancelled a planned trip to Spain, where he was due to attend a pan-European right-wing gathering, following the electoral setback, according to Noticias Argentinas.

The lender's continued confidence in Argentina's trajectory was demonstrated in July when it approved the first review of the $20bn Extended Fund Facility programme, authorising a $2bn disbursement despite concerns over critically low foreign currency reserves. On September 2, the government announced direct foreign exchange market intervention to address mounting currency pressures.

This electoral result presents a significant test for Milei's political sustainability as his economic reforms face growing public resistance. While IMF backing provides crucial international legitimacy, the administration must now navigate implementing painful austerity measures with diminished political capital, potentially complicating future reform efforts and Argentina's economic stabilisation prospects. In this regard, the upcoming October midterm elections could prove crucial in determining Milei’s Congressional power.