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ARGENTINA - In Brief 27 Oct 2019 by Esteban Fernández Medrano

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Today’s results of the general elections in Argentina, which are expected to be published between 9 pm and midnight, will put an end to the political limbo that emerged after the surprising result of the primaries in August. The electoral outlook that had been previously nourished by polls, drastically shifted after the primaries, from a close call race between the government and the Kirchnersit’s (with a mild lead of the opposition), to an overwhelming 16% victory of Alberto Fernández (AF). The fact that the primaries acted as pre-election, rather than as a mechanism to choose party-candidates, generated the paradox of a perceived defeat of Mauricio Macri (MM) before the actual elections happened. This situation generated even more uncertainty than just anticipating the usual “lame duck” period by two months[1], given that the alleged winner AF could not yet assume the political responsibilities of acting as president-elect. It is also more unsettling than the delay that would happen in case that there is a ballotage, as in such case the presidential candidate is not perceived as having lost already and if so, he can abandon the race without generating an institutional disruption (as former president Carlos Menem did in 2003, against Nestor Kirchner). The political limbo led to a defensive “wait and see” attitude of many economic agents and holders of Argentine assets, for starters the IMF. The delay disbursing the last tranche until it can negotiate future payments with the new administration is a clear example of such defensive positions. This is a particularly sensitive issue as it resembles the response of the IMF in December 2001, when it decided to cut its finan...