Argentina President Javier Milei’s political party exceeded expectations in Sunday’s midterm legislative elections, which were widely seen as a referendum on the libertarian outsider’s agenda of economic reform. The qualified victory — which was by no means certain — enables Milei to cement and build on his economic reforms after Argentina languished for nearly a century under socialist rule. Milei’s victory is also good news for the Trump administration, which bet heavily on his success and backed him to counter Chinese influence in Latin America.

Since his election in late 2023, Milei has achieved most of his economic reforms through emergency powers, which have now expired. He has reduced inflation from more than 200% annually down to 20%, while simultaneously reducing poverty and achieving economic growth of 6.5% per year.

But those economic achievements appeared to falter this year, as the Argentine National Congress, controlled by a coalition of Peronist (socialist) and other leftist parties, pushed through profligate spending bills over Milei’s veto. In early September, the Peronist bloc carried provincial elections in Buenos Aires, home to 40% of the nation’s population, by a wide margin of 46% to 34% for Milei’s La Libertad Avanza (LLA, “Liberty Advances”) party.

In turn, this out-of-cycle electoral defeat caused investors to panic, triggering a run on the Argentinian peso and placing Milei in an even more precarious position. The U.S. responded by announcing a $20 billion currency swap with Argentina, effectively a loan to shore up Argentina’s currency ahead of the midterm elections.

Amid these troubles, expectations for LLA were low heading into the October midterms. Analysts predicted that more than 35% of the vote would be a positive outcome for Milei’s problem-filled party. Besides this, Argentinian legislators serve staggered terms, which means that only one-third of the national Senate and one-half of the national Chamber of Deputies were up for a vote, making it mathematically impossible for Milei’s upstart party to gain a majority in either chamber.

With votes distributed among a dozen or more parties in Argentina’s political system, 35% of the vote is not so poor a showing as in America’s political system, but it is still far short of a majority. However, 35% was an important threshold for LLA to clear, since it would give the LLA and allied parties the ability to block veto overrides, which require a 2/3 majority.

When the votes were counted, LLA had far exceeded these modest expectations, winning nearly 41% of the vote, compared to 32% for the Peronist opposition alliance. More importantly, LLA captured 64 out of 127 available seats in the Chamber of Deputies and 14 out of 24 seats available in the Senate. Milei’s upstart party, which first competed in national elections two years ago, currently has 37 deputies and six senators, meaning that the 2025 election roughly tripled its representation in the country’s Congress.

These results give the LLA just over 100 seats in the 257-seat Chamber of Deputies and more than a quarter of the 72-member Senate. Meanwhile, the left-wing Peronists and an outright communist party form a sizable opposition alliance. The LLA can block legislative vetoes, but to pass legislation, they will need to win over various smaller centrist parties. In fact, Milei will likely form a coalition with at least some other parties, such as former Argentinian president Mauricio Macri’s Republican Proposal (PRO), by inviting these parties into his cabinet.

Notably, LLA won 41.5% of the vote in the Buenos Aires province, compared to 40.8% won by the Peronist coalition, a marked improvement over their showing in September.

“Today is clearly a historic day for Argentina,” celebrated Milei. “The Argentine people decided to leave behind 100 years of decadence and to persist on the road of freedom, progress and growth.” Argentinian financial markets appear to agree, and the peso strengthened more than 5% on Monday. U.S. President Donald Trump, after betting on Milei, cashed in his own congratulations, “Our confidence in him was justified by the People of Argentina.”

The unexpectedly strong showing enables Milei to continue his economic reform agenda, which still has a long way to go before Argentina can once again consider itself a stable, prosperous nation. But the first step on that road was Milei’s party surviving its own incumbency test, which it has now passed comfortably. Now that foreign investors, international creditors, and the United States are satisfied that Milei’s sound economic policies can survive politically, Milei can work more easily to put the nation’s currency, debt, and economy back on track.

In Argentine politics, free markets are beating out socialism for now — which is more than one can say for New York City.