BUENOS AIRES – Voters across Argentina’s most populous province of Buenos Aires headed to the polls on Sunday to choose lawmakers in an unusually high-stakes local election seen as a referendum on the performance of libertarian President Javier Milei and a bellwether for crucial midterms next month.

The Buenos Aires provincial election is polarized between Milei’s recently formed libertarian party and Peronism, the ideologically flexible populist movement that has held sway in Argentina for decades.

Milei, whose barely 4-year-old La Libertad Avanza party has subsumed much of the center-right, views this a chance to embarrass the Peronist opposition led by former President Cristina Fernández de Kirchner in its historic stronghold.

“These elections will be useful to understand the level of support that the government has but also how strong the Peronist party is, especially ahead of October midterms where the government needs a good result to push its reforms,” said Juan Cruz Díaz, the head of Cefeidas Group, a consultancy in Buenos Aires.

But the test comes at a tough time.

A bribery scandal has rocked the nation, entangling Milei’s politically powerful sister and undercutting the president’s image as a political outsider pitted against the corrupt Peronist elite. Milei denies the allegations that his sister took kickbacks from pharmaceutical contracts.

The opposition-dominated Congress has started to turn against Milei’s harsh cuts to social programs, overriding his veto on raising disability benefits and approving bills that boost scant funding for healthcare and universities.

Adding to the pressure, Argentina’s economy is shrinking, consumer confidence is falling, unemployment is rising and interest rates are soaring to record highs as the government repeatedly intervenes in the currency market to prop up the peso and hold down inflation in hopes of placating cash-strapped voters.

As a result, Milei hasn’t built up enough foreign currency reserves to assure global markets that he can make good on his promise to transform this nine-time serial defaulter into a normal country capable of servicing its debts.

“Milei has a very strong ideology, and his vision is that the state has to have a minimal impact and investments have to come from the private sector. But that hasn’t materialized yet,” said Ana Iparraguirre, an Argentine political analyst and partner at Washington-based strategy firm GBAO.

Sunday’s vote to elect 69 provincial lawmakers and councilors in dozens of municipalities will not change national policy, nor will it affect the national Congress that holds its midterm elections to renew half of the lower house and a third of the Senate in late October.

But the election will offer foreign investors important clues about whether Milei’s party can gain enough seats in Congress to push through the president’s radical economic overhaul.

Despite the headwinds, Milei has a few assets in his favor: He has fulfilled his flagship campaign pledge to bring down Argentina’s sky-high inflation rate. And his rivals — whose reckless spending helped deliver the crisis that he inherited — are in disarray.

Former President Fernández, who pulled Peronism to the left during her 2007-2015 tenure and remains its most powerful leader, has been banned from politics for life and placed under house arrest over a corruption conviction.

The party’s future leadership remains uncertain. The movement has struggled to articulate a clear political vision beyond opposition to Milei or economic policy beyond the same patchwork of price controls and cash handouts.

Nonetheless, a sputtering economy and ballooning government corruption scandal has given a jolt of optimism to Peronists in the province where Juan Domingo Perón, the charismatic army general and grandmaster of 20th century Argentine politics, first built his working-class base in the 1940s.

“Right now, people don’t have a lot of options in front of them,” said Iparraguirre. “They may be disillusioned with Milei. But they don’t know where to go.”