Investing.com – The faces a tough road ahead, ING warned Tuesday, as the recent shock primary election victory for Argentina’s far-right presidential candidate Javier Milei throws the country’s political and economic future into doubt. 

Far-right libertarian economist Javier Milei, who wants to scrap wants to scrap the peso and abolish the country’s central bank, won 30% of the vote in the recent primary elections, which serves as a dress rehearsal for the general election slated for Oct. 22.

“The only way is down,” ING said, referring to the peso’s likely projection as the surprise victory for Milei not only raises uncertainty on the outcome of the country’s political landscape and Argentina’s path ahead with the International Monetary Fund.

“The IMF is currently reviewing whether to disperse the next $7.5bn tranche of a $44bn four-year programme,” ING added, flagging the fragile state of the cash-strapped economy as drought wreaked havoc on the agriculture sector, the country’s main source of income and employment.  

Total losses from the impact of record drought are estimated at about €20 billion, or 3% of Argentine GDP for the year 2023, according to recent estimates from CREA consortium, which represents a consortium of Argentine agricultural companies. 

Milei on Tuesday, however, told local radio that he was in talks with the IMF on the country’s $44 billion loan deal following a request from the Washington-based lender to schedule a meeting.

Following the shock result, the country’s central bank on Monday hiked rates and devalued its currency, fixing it at 350 pesos per dollar until the October election to stave off concerns over its currency amid a shortage of funds.

But the bearish bets on a hard landing for the currency continue to build, with the one-year USD/ARS outright forward nearing 1,000, ING says, adding that the “road ahead looks a tough one for the peso.”