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BUENOS AIRES, ARGENTINA - NOVEMBER 14: President of Argentina Alberto Fernandez speaks in a recorded message after the legislative midterm elections at the Frente de Todos party bunker on November 14, 2021 in Buenos Aires, Argentina. After losing in most of the districts in the primary elections held on September 12, ruling party seeks to reverse the results. Argentina renews half of the Chamber of Deputies and a third of the Senate in eight districts. (Photo by Tomas Cuesta/Getty Images)Tomas Cuesta/Getty Images

Argentina’s President Alberto Fernandez vowed to resolve the country’s debt with the International Monetary Fund and the “evil” of inflation on Sunday night, after voters firmly punished his Peronist party in a bruising midterm election.

He pledged to take aim at wage-sapping inflation that is running at above 50% and to send a long-term economic plan to Congress in early December, something investors and the IMF have sought amid negotiations over a new deal with the Fund.

“In this new stage, we will deepen our efforts to reach a sustainable agreement with the IMF. We must clear the uncertainties that come with this sort of unsustainable debt,” Fernandez said in an address to the nation.

The centre-left president called for “patriotic” co-operation with the conservative opposition, which was winning in most key races, including an important lower-house battle in the populous province of Buenos Aires and swing Senate votes.

The ruling party was on track to lose its majority in the Senate, held for almost 40 years, and to be pegged back in the lower chamber with the majority of votes counted.

The vote saw half the seats in the lower Chamber of Deputies up for grabs and a third in the Senate, with voters focused on rampant inflation and high poverty levels sharpened by the COVID-19 pandemic.

“I know very few people who make enough money to get to the end of the month,” said Ricardo Arese, 69, a security guard in the capital Buenos Aires. His household expenses have risen 300% since 2016, he said, and he sees little reason for optimism.

“We’re looking at a very tough two years ahead.”

Voting went smoothly under sunny skies in the Southern Hemisphere spring, but many voters were angry or downcast.

“I’m here to vote with the hope that everything will change. We are tired,” said Mirta Laria, 62, a housewife in Buenos Aires. “Every day we are a bit worse off and the sad thing is that our children only see a way out for their life abroad.”

President Fernandez’s popularity was hit due to COVID-19 lockdowns, inflation and a currency that is hitting record lows against the U.S. dollar despite strict capital controls.

Ignacio Labaqui, Argentina analyst at New York-based consultancy Medley Global Advisors, said a big loss would mean Fernandez would be left with “little political power, as a part of coalition full of internal grievances and with a pile of economic problems to fix, starting with inflation.”

‘PERONIST FAMILY’

The governing coalition held 41 of the 72 seats in the Senate and makes up the largest bloc in the lower house. That majority now looks likely to be lost.

Focus has been on lower-house results in densely populated Buenos Aires province, while key Senate races are in provinces such as La Pampa, Chubut and Santa Fe. The opposition is well ahead in all those races.

There are 127 seats in the Chamber of Deputies in play out of a total 257, and 24 Senate seats in eight provinces at stake.

A major defeat weakens Fernandez as pressure builds to strike a new deal with the International Monetary Fund to roll over $45 billion in debt payments the grains-producing country cannot make.

It could spark a cabinet reshuffle as the primary defeat did and split the government between moderates and radicals allied to influential Vice President Cristina Fernandez de Kirchner.

Since the country’s 2001/02 economic meltdown, which threw millions of middle-class Argentines into poverty, many families have come to rely on social spending by Peronist governments.

One voter said she was sticking with the ruling party as she felt part of the “Peronist family.”

Another voter, Graciela Pacri, a 47-year-old housewife with four children, said state support was vital to surviving amid hard economic times.

“If it weren’t for a subsidy I have, I don’t know how I would live since it is difficult to find work,” she said.