Four weeks ago, it was widely expected that the next president of Argentina would be the candidate of the ruling party. But in a first-round election that stunned the nation, opposition leader Mauricio Macri stole the momentum, and as voters return to the polls on Sunday the presidency looks like his to lose. Macri is the more market-friendly candidate and global companies are lining up to invest, persuaded that the country will reopen for business since he is leading the ruling Peronist party’s Daniel Scioli by 6 to 8 percentage points. Up to a tenth of voters remain undecided, however, and polls were off a month ago, so there is room for surprise.
A central plank of Macri’s policies is the immediate lifting of currency controls to boost investor confidence amid the lowest reserves in nine years. Scioli says Macri’s plan would lead to a massive devaluation that would destroy purchasing power and fuel inflation already running at 24 percent.
In reality, the state of the economy will dictate austerity measures from either candidate, said Diego Ferro, co-chief investment officer at Greylock Capital Management.
“Argentina unfortunately doesn’t implement changes when it should, only when it has to and there is no doubt that next year they will have to implement changes regardless of who wins,” Ferro said by phone from New York.