Argentine President Javier Milei's party suffered a provincial election loss, 40% of electorate, amid corruption allegations and opposition to his policies.

This past weekend, Argentine President Javier Milei (pictured at the U.N. headquarters in New York City in September 2024) suffered a notable loss in provincial elections. File Photo by John Angelillo/UPI UPI Argentine President Javier Milei speaks at a campaign center in La Plata, Buenos Aires, on Sunday. Milei acknowledged that his La Libertad Avanza Party suffered a "clear defeat' in the Buenos Aires Province elections. Photo by Juan Ignacio Roncoroni/EPA UPI Israeli Prime Minister Benjamin Netanyahu greets Argentine President Javier Milei in the Knesset on June 11, in Jerusalem. File Photo by Debbie Hill/ UPI UPI

Sept. 8 (UPI) -- Argentine President Javier Milei's party suffered a provincial election loss, representing 40% of the South American nation's electorate, amid corruption allegations and opposition to his policies.

The populist and self-declared "anarcho-capitalist" is vowing to make changes after the "clear defeat," but not with his economic policy.

Milei, who was not on the ballot, assumed office on Dec. 10, 2023, in his four-term term. He can run for office again in 2027 and again in 2035.

On Sunday, his La Libertad Avanza Party received 34% of Argentina's biggest province, Buenos Aires, compared with the left-leaning Peronist opposition with 47%.

Seats were not up for election in the capital of the same name. His party won in the city elections in May.

Turnout was nearly 65%.

For the first time after his election, his approval rating went under 40% in a poll released late last month. In July, 48% of Argentines viewed his administration positively but three weeks later, that number fell to 39.8%, while 57% said they disapprove of his presidency.

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Milei said "we suffered a setback, and we must accept it responsibly. If we've made political mistakes, we're going to internalize them, we're going to process them, we're going to modify our actions."

But, he added: "There will be no retreat in government policy."

His economic policy initially caused unemployment to rise, economic activity to decline and poverty to surge, but there ultimately was a drop in monthly inflation. Bonds rallied and currency strengthened.

Argentina's country-risk index is at its lowest point in five years. Wages, however, remain low, with prices and poverty high.

Chief of Staff Guillermo Francos said "the macroeconomy is growing, but people are not seeing it" and they "are wary of those economic accomplishments."

"We didn't suffer a hurricane yesterday, but it was a pretty strong wind," Francos said during an interview with Radio Mitre. "Like the president said, it's time for self-criticism, analyzing where we fail."

The president promoted an obscure token called $Libra, which soared in value after his endorsement before collapsing dramatically, prompting criminal complaints alleging fraud.

"Before that, Milei had all the indicators in the green. After $Libra, they turned red," Santiago Giorgetta, director of the consulting firm Proyección, said.

Also, there are leaked audio recordings while he was executive director of the National Disability Agency, in which he allegedly referred to requests for bribes. In the agency's purchase of medicines, 8% of contracts allegedly were set aside for illicit payments to officials close to the president, including his sister, who also is his top aide.

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The recording has been attributed to his attorney, Diego Spagnuolo.

"Everything [Spagnuolo] says is a lie. We will take him to court and prove he lied," Milei told reporters last month.

In the poll, corruption was the top concern for Argentines at 44.5%, far ahead of poverty at 16.1% and insecurity at 13.2%.

Only 35% of respondents consider Milei credible and honesty dropped to 32%.

The legislative elections' results were a clear message to the president.

"This is not yet the worst moment of the Milei government, but the beginning of its worst moment," sociologist Juan Gabriel Tokatlian, said, noting challenges in the midterm elections on Oct. 26 with half of the Chamber of Deputies and one-third of the Senate up for reelection.

He is hoping to expand on the party's small minority in the Congress, whi hsi dominated by the opposition.

"The ballot boxes told Milei that public works cannot be halted," Axel Kicillof, the left-leaning governor of Buenos Aires Province, said. "They explained to him that retirees cannot be beaten, that people with disabilities cannot be abandoned.

"The ballot boxes shouted that education, healthcare, science and culture cannot be defunded."

Milei vetoed bills to increase pensions and disability benefits. Last week the Congress overturned the president's veto.

Milei is an ally of U.S. President Donald Trump. He was the first foreign leader to visit Trump at Mar-a-lago in Palm Beach, Fla., after his election in November 2024.