Argentine Elections: Inflation Is Likely Biggest Obstacle to Government’s Reelection

A study shows that when annual inflation surpasses a certain percentage, the chances of a government achieving reelection diminish

Photo: Erica Canepa/Bloomberg
June 08, 2023 | 07:55 PM

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Buenos Aires — It appears to be a sort of electoral axiom: governments that go to the polls with high inflation do not win elections.

But Far from being an unfounded maxim, statistics show that governments that go to the polls with an annual inflation rate above 40% rarely manage to hold on to power. This is a sign for Argentina’s Frente de Todos coalition, which will seek to defy this logic in October, even when inflation in Argentina is above 100%.

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Ignacio Labaqui, a political scientist and a senior analyst at Medley Advisors, analyzed the results of more than 150 elections in Latin America from 1978 to the present and has noted how the ruling parties fared according to the annualized inflation index in the month of the elections.

On 15 of the 16 occasions in which Latin Americans went to the polls with an inflation rate higher than 40% per year, the ruling party was defeated.


Inflation, the mother of all battles

The study, Labaqui explained to Bloomberg Línea, covers 151 presidential elections in Latin America between 1978 and the last election in Paraguay.

However, he clarified, it does not include Venezuela’s 2018 elections or Nicaragua’s 2016 and 2022 elections, given that “those countries are no longer democratic.”

In the case of Mexico, he added, he does not take into account the elections of the 1980s, for the same reasons.


The only case recorded in that period in which a ruling party was able to hold onto power despite having an annual inflation rate of over 40% occurred in Brazil, when Fernando Henrique Cardoso was elected president to begin his term of office in 1995.

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The reason for this anomaly, explained Labaqui, is that inflation in the 12 months prior to October 1994 in Brazil was around 1700%, but had gone from 40% per month in May of that year to the 2%-3% per month in the month of the election.

“Cardoso won in the first round,” he recalled.

Cardoso had been Brazil’s finance minister between May 1993 and March 1994.


Of the 151 presidential elections analyzed by the political analyst, 60 resulted in the continuity of the ruling party, while in the remaining 91, the opposition triumphed.

Although presidential elections in the region since 1978 tend to show a greater tendency toward the opposition winning, the difference is smaller when inflation is less than 40% per year.

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