BUENOS AIRES, Argentina _ Opposition candidate Alberto Fernandez swept Argentina's presidential election on Sunday, ousting pro-market incumbent Mauricio Macri and tilting the nation back toward left-wing populism at a time of economic crisis.
Fernandez, a political insider who has never held national office, secured 48% of the vote with 91% of ballots counted, enough to avoid a runoff next month. Macri won 41%, while other candidates divided up the rest.
Macri congratulated Fernandez in a speech on Sunday night to supporters at his campaign headquarters, adding "I invited him for lunch on Monday."
Fernandez's win is a rebuff to austerity and signals the return to national power of Peronism _ an anti-elite political movement that traditionally favors workers over business owners. Voters objected to the policies of Macri's government, seeing it as out of touch with the needs of ordinary Argentines.
But the outcome was tighter than expected, and suggests some wariness about Fernandez's ability to turn the economy around. Macri narrowed the gap from an August primary, when he languished 16 percentage points behind _ an outcome that spooked markets, sending the peso tumbling and forcing Macri to enact capital controls. His party also fared better than forecast on Sunday in several districts.
"That's an epic comeback for Macri," said Jimena Blanco, political research director at consulting firm Verisk Maplecroft in Buenos Aires. "While still a loss, it creates a more balanced Congress and political landscape going forward."
Fernandez's promises to improve things will run into immediate difficulty when he is sworn in on Dec. 10, given a lack of funds to play with: The economy is contracting, inflation is above 50%, unemployment is more than 10% and a third of the population lives below the poverty line. Investors also expect the government to default at some point.
Fernandez must satisfy the competing demands of far-left factions in his broad coalition that want more social spending, and the International Monetary Fund, which agreed to a record $56 billion bailout last year. The IMF will likely have little appetite to dole out more cash if Fernandez implements policies that risk a balanced budget.
His victory, and the uncertainty around it, comes at a fragile moment for Latin America. A wave of violent, anti-austerity protests has rocked Chile and Ecuador; Peru faces major political uncertainty; Venezuela's economy has collapsed; and the presidential election result in Bolivia has been called into question.
"Fernandez will have to be a little bit humble about the victory," said Alberto Bernal, chief global strategist at XP Investment in Miami. "The Fernandez win was priced in, but this tight a difference was not priced in."
A key issue will be how Fernandez interacts with his powerful vice president. Cristina Fernandez de Kirchner was Argentina's president from 2007 to 2015 and handed Macri an economy damaged by years of Peronism. She was initially expected to run for the top job, and her influence in the new administration will be closely watched.
In her time as president, Kirchner raised tariffs, printed money, ignored investors and published economic data that understated inflation and overstated growth. While Fernandez's advisers say he'll control policies _ Kirchner kept a very low profile during the election campaign _ her popularity helped catapult him to victory and her presence concerns investors.
Now a senator, Kirchner faces 11 separate corruption cases. She denies wrongdoing in all of them. Multiple high-ranking officials in her government, including her former vice president, have been convicted on separate graft charges.
Fernandez has a broad array of advisers, from traditional policy makers to economists who helped implement Kirchner's policies when she was in office.
On the campaign trail he's talked about raising salaries and social security payments, boosting exports, cutting interest rates and lowering inflation, all while reaching a fiscal surplus. He's also spoken about having a "friendly" renegotiation with creditors and the IMF.
The central bank planned to meet Sunday night to analyze the results and potential measures ahead of the market opening on Monday, according to two people with direct knowledge of the matter. A central bank spokesman said financial institutions will open normally.
Macri's defeat marks a stark finish for a leader who arguably had more international support than any president in recent Latin American history. Elected in 2015, Macri promised to turn around the economy, slash inflation, end poverty and put Argentina back on the world stage with pro-market reforms.
Instead, he struggled to attract foreign investment. His government racked up debt to cover the bloated deficit he inherited from Kirchner.
The economy did show promising signs in 2017, and Macri's party performed strongly in midterm elections.
But a record drought, falls in global markets, and zigzagging policies dragged the economy into a currency crisis last year and recession. The election uncertainty only compounded the downturn. Macri's return to the IMF hurt his approval rating, dredging up scars from its last deal with Argentina in 2001, which ended in economic collapse.
Argentina's economy is likely to have contracted for three of Macri's four years in office. Now Fernandez takes the reins with no easy choices ahead.
"The dynamic between Macri and Fernandez in the next 45 days will define and set the tone for the months to come," said Juan Cruz Diaz, director of consulting firm Cefeidas Group. "The strength of the opposition, as a result of a robust electoral performance of Macri today, will force Fernandez to negotiate to advance his agenda."
