By Lucila Sigal
BUENOS AIRES - Argentina's ruling Peronist party was on the defensive on Monday after a bruising congressional primary result saw the center-left coalition lose ground in a number of key seats, including the battleground of Buenos Aires province.
The chief of staff, Santiago Cafiero, defended the government, saying that its ability to lead the country was not at risk and that the party would take on board the message from the polls.
"Governance is not in question," Cafiero told local radio. "We are committed to hearing the message from the polls."
The conservative opposition Together for Change took some 40% of the vote in the open primary election on Sunday versus 31% for the ruling party in the mandatory ballot, which is basically a dry run ahead of the Nov. 14 midterm election.
That included leading by over four percentage points in Buenos Aires province, a stronghold for the Peronists, underscoring voter dissatisfaction after a tough year with rampant inflation, the impact of the coronavirus pandemic and currency controls.
The vote was a big blow to the Peronist government of President Alberto Fernández, who took office in December 2019 after strongly defeating conservative incumbent Mauricio Macri, pledging to revive an economy mired in recession.
Since then the impact of the pandemic saw the economy plunge last year and poverty levels rise, while annual inflation running at over 50% has sapped savings and salaries.
"Our commitment is to reactivate the economy. In the middle there was a pandemic and we had to take charge," said Cafiero, noting that other ruling parties worldwide had taken hits to their popularity during the health crisis.
"We know why people voted for us: so we can generate work, and improve livelihoods and get back what we lost. We are going to do it regardless of the electoral result."
Cafiero said separately on Monday that there was no plan for a cabinet reshuffle in the wake of the vote.
The primary results, if repeated in November, would see the ruling party would lose six seats in the Senate and nine in the lower Chamber of Deputies, meaning it would lose its majority and leading minority positions in the two houses respectively.
Argentina's bonds and equities rose on Monday, with investors cheering the advances made by the conservative opposition, seen as more business friendly.
"The reason for markets rallying is that the results give a strong indication we are going to see a change of government in 2023," said Graham Stock at BlueBay Asset Management in London, referring to the presidential election in two years' time.
"It might seem a bit far away but we know the next year or two is going to be taken up with the recovery from the pandemic ... So it makes sense to have a medium-term view."