President Mauricio Macri alongside Treasury minister Nicolás Dujovne (L) and Finance minister Luis Caputo (R). Photo via DyN/Tony Gomez.

It’s election week in Argentina, with Mauricio Macri’s ruling Cambiemos coalition testing itself for the first time against multiple strands of mostly Peronist challengers, hoping to gain seats in Congress to push its economic agenda further forward.

With that in mind, Bill Clinton’s 1992 unofficial campaign slogan, now turned analytic cliche about what decides elections (“the economy, stupid,” for anyone out of that loop), becomes an even more inescapable angle than usual to understand what’s going on.

Indeed, opposition and government leaders spent much of the build up to this Sunday’s mid-term primaries clashing over the costs and potential upsides of the reforms and austerity policies implemented since Macri’s win in late 2015.

Take former President Cristina Fernández de Kirchner’s words last Thursday during a campaign meeting with senior citizens in Lomas de Zamora, the second-biggest municipality in the decisive Greater Buenos Aires region, where roughly a quarter of the country’s voters live. After a brief exchange with a pensioner sitting beside her, she addressed the public to say:

“María was billed 15,000 pesos for her natural gas consumption, couldn’t pay and was cut off from the service. And how are you staying warm now, María? Oh, electrical heating, I see… but then when that bill comes and you can’t afford it either what will they do? Will they stop giving you electricity also? No, what has to stop is the way things are going, and we will stop it the way we stop things in democracy,” Fernández de Kirchner told a cheering audience.

Throughout the campaign, the core message of her Unión Ciudadana coalition has been delivered by handing the mic to people who underwent hardships since Macri’s utility rate hikes in 2016, like in this case, or since the drop in the inflation-adjusted purchasing power of salaries, minimum pensions and social programs that followed late 2015’s devaluation of the peso.

And in the outskirts of Buenos Aires, especially in historic Peronist strongholds such as the poorer south and south-west, where Cristina was speaking, those cases are quite easy to find, which explains why she comfortably leads all polls there.

GEOGRAPHIC WINNERS AND LOSERS

The country, however, is too diverse for Cristina’s message to resonate uniformly. Macri also brought good news to the pampas’ countryside economies as soon as he took office. A production boom in grain and cattle-raising followed quickly after he lifted both export quotas and export duties on those products, and the subsequent cash flow to the region raised sales even for those not directly connected to agri-businesses but living close to it.

The love affair between Macri and the wealthiest rural zones inside some of the country’s most populated provinces (Córdoba, Santa Fe, Entre Ríos, Mendoza, Buenos Aires) is thus likely to continue this Sunday, with large areas of those districts’ electoral maps painted Cambiemos yellow by the end of the night.

And the same is true of the country’s capital Buenos Aires city where, even though the government’s candidate Elisa Carrió has made her campaign mostly about fighting Peronist corruption, large amounts of middle-class, internationally-minded professionals have also benefited economically from the end of the currency exchange restrictions that froze private sector growth between 2012 and 2015.

The city’s population, which is old and rich by national standards, is also reaping gains from Macri’s decision to stop freezing retroactive payments to the country’s highest-earning pensioners. A Carrió landslide in a district that has also been historically at odds with Peronism, therefore, would hardly be surprising.

Greater Buenos Aires, on the other hand, has bore the cost of government reforms more strongly than any other region. This largely working-class area is much younger and poorer on average than BA city proper, so drops in the purchasing power of, say, the widely-popular Universal Child Allowance program or minimum pensions inevitably hit people much harder.

BA’s outskirts also rely on industrial production more heavily than the countryside or city centres. And so far, the drop in consumption rates following 2015’s devaluation hit demand for those who manufacture for the local market, while the Central Bank’s contracting monetary policy also kept the peso-to-the-dollar exchange rate too low to allow export-based industries to blossom either.

Buenos Aires Province governor and Cambiemos’ most popular figure María Eugenia Vidal knows this, saying in a recent TV interview that “we recognize economic improvements have not yet reached everyone” and that some have had a “rough year and a half.”

Reportedly, Vidal even asked Macri to freeze scheduled hikes to public transportation, which would’ve disproportionately hit BA’s working-class outskirts too, fearing the election would otherwise become impossibly uphill. The party’s economic message for the region also adapted, trying to focus on public works program launched this year instead of cash availability.

Similar struggles are just as true in the also traditionally Peronist outskirts of Santa Fe’s Rosario or Córdoba city, so Cambiemos victories in the second- and third-largest provinces are not a given either, despite their potential gains in their richer southern countryside. Macri has one less problem in these provinces, though, as the subsidy cuts that lead to utility rate hikes affect the rest of the country much less, and are sometimes even celebrated there, given that the Kirchnerite government concentrated most of them in Buenos Aires.

THE FAMED ‘GREEN SHOOTS’

The government’s economic plan when it took charge of the presidency always had the 2017 mid-terms in mind, so most of the cuts and bad news were planned for 2016, hoping that the economy would jumpstart soon after.

The bounce-back proved to be slower than they expected, but the 2.2 percent GDP decline seen in 2016 now seems to be at least reverting to the mean. The last economic activity figures published by the INDEC statistics bureau, those of May, showed a somewhat surprising 3.3 percent year-on-year growth for the month.

Of course, that figure comes when compared against the very poor May 2016, when the economy was shrinking by 3.1 percent, but it is still relatively encouraging, by far the best since 2015. And it comes paired with similar bounce-backs in areas ranging from construction (up 17 percent in the last available month, although also only when compared with a similarly brutal drop a year ago) to car production (which in June recovered 9 percentage points of the close to 20 it was losing that time last year).

Will that, plus the surely favorable but much smaller rural vote, be enough to turn the tide in the race everyone’s watching, that of Buenos Aires province? Or is it too little too late?

The precedents of 2013 and 2015 seem to show that these kind of timid economic recoveries can still prove insufficient to win. Peronist candidates backed by then-President Fernández de Kirchner lost to lawmaker Sergio Massa first and Governor Vidal later, with the economy basically flat-lining on average since 2012, as mild growth on election years followed the moderate recessions of 2012 and 2014.

Of course, the whole Cambiemos argument lies on the premise that this time is different, and that their economic recovery will be sustainable due to an increased focus on investment over consumption. But the rise in dollar-denominated debt and the country’s social and political instability mean that’s not a sure bet either.

In any case, as most congressional tickets have already been decided behind coalitions’ closed doors, Sunday’s primaries are mostly a dress rehearsal for October, when lawmakers and senators are actually elected, so brace yourselves for two more months of shouting matches on how to interpret the latest economic figures before the race is decided for good.