(Bloomberg) -- Uruguay’s presidential election will go to a runoff next month after neither candidate reached the absolute majority needed to win, while a contentious overhaul of the country’s pension system failed to pass.
The opposition Broad Front’s candidate, Yamandu Orsi, is set to face former lawmaker Alvaro Delgado of the ruling center-right coalition’s National Party on Nov. 24, according to local media citing preliminary results. Orsi had 41.4% of the vote compared to 27.8% for Delgado with almost 71% of voting stations reporting to the Electoral Court as of 12:10 am local time Monday.
Candidates representing the other coalition members — the Colorado Party, Open Forum and the Independent Party — collectively received 20% of the vote.
“Let’s make one last effort with more enthusiasm than ever” to win the runoff election, Orsi told his supporters in Montevideo. “Uruguay needs to grow and produce more and take much better care of our people. The Uruguayan people deserve to live better.”
Votes on two proposed constitutional reforms, known locally as plebiscites, that would have allowed police to search homes at night with a court order and dramatically altered the social security system were short of the absolute majority needed to pass. Only about 37% of Uruguayans had voted in favor of the pension system reform.
The failure of the social security plebiscite lifts a cloud of uncertainty hanging over Uruguayan assets and the next government’s economic program. The measure threatened to widen the budget deficit by mandating higher pension outlays and would have abolished pension funds whose $23 billion in assets are the life blood of local capital markets.
Sunday’s vote sets the stage for a competitive runoff election. While the share of votes for the incumbent coalition exceeds that of the Broad Front, a small percentage of those voters are expected to back the left-wing party in November.
The Broad Front has sought to tap angst over violent crime and a post-pandemic recovery that hasn’t trickled down to all Uruguayans. But Delgado, 55, enjoys tailwinds from an economy that is expected to grow as much as 3.5% this year and President Luis Lacalle Pou’s high approval ratings.
Orsi, 57, served two terms as governor of Uruguay’s second-most populous department. The former history teacher has campaigned on reviving an economy whose annual growth averaged little more than 1% per year in the last decade. Orsi’s policies include tax incentives to attract investment, industrial policy to support agriculture and high-tech sectors and a less aggressive overhaul of the social security system than that sought by the labor unions backing the plebiscite.
His likely finance minister, economist Gabriel Oddone, says he will seek a primary fiscal surplus and retain the inflation-targeting regime implemented by the current administration.
Deglado, who served as a senior aide to Lacalle Pou before resigning to run for president, has campaigned under the slogan “reelect a good government” in reference to continuing the pro-business policies of his former boss. His finance minister pick Diego Labat, who previously ran the central bank, wants to accelerate growth by increasing private investment and opening the economy to more competition.
“We want to be a political project that unites Uruguayans. I have faith that we are going to represent a lot more than coalition voters,” Delgado, flanked by the other coalition presidential candidates, said at an event in the capital.
The winner of the Nov. 24 runoff will start a five-year term in March 2025.
(Updates with latest preliminary results and Orsi, Delgado comments in Paragraphs 4 and 12)
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