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Argentina's center-left President Alberto Fernandez called for dialogue with the opposition after Sunday's midterm parliamentary elections, with projections showing his governing coalition has lost control of Congress.
Ahead of the election, there was widespread discontent over the state of the economy, which has been in recession since 2018 and was hit hard by the Covid-19 pandemic.
Having already been in the minority in the Chamber of Deputies -- the lower house -- Fernandez's Frente de Todos (Everyone's Front) coalition looked set to drop from 41 to 35 seats in the 72-member Senate, based on projections with over 90 percent of votes counted.
"If the numbers are confirmed, effectively we've lost the quorum in the Senate," a government source told AFP.
This would be the first time since Argentina's return to democracy in 1983 that Peronism -- a leftist movement based on former president Juan Peron that now covers a broad spectrum of political leanings -- would not have a majority in the Senate.
Fernandez will now likely be forced to make concessions to the opposition during the last two years of his mandate in order to pass laws or make key appointments, including to the judiciary.
"We need to prioritize national agreements if we want to resolve the challenges we face," said Fernandez, adding that he would approach opposition groups to try to find common ground.
"An opposition that is responsible and open to dialogue is a patriotic opposition."
Nearly half the seats in the Chamber of Deputies were up for grabs, as well as a third of Senate seats, in Sunday's vote.
Interior Minister Wado de Pedro said turnout in the compulsory election was between 71 and 72 percent.
- 'Difficulty ahead' -
Fernandez had been on the defensive since the Frente suffered a bruising defeat in September's primaries, picking up just 33 percent of the vote compared with 37 percent for the main opposition group Juntos por el Cambio (Together for Change), led by Fernandez's predecessor Mauricio Macri.
"These next two years are going to be difficult," Macri said Sunday, while assuring voters that his coalition would "act with great responsibility."
Fernandez "will have to negotiate law by law," said Raul Aragon, political scientist at the National University of La Matanza.
He predicted the opposition would be open to talks though.
"It won't serve them to not engage in dialogue, and appear anti-democratic" before the presidential elections in 2023, Aragon said.
Since the primaries, the government had been in damage limitation mode, announcing last month a deal with the private sector to freeze prices on more than 1,500 basic goods following street protests demanding greater food subsidies.
It has also increased the minimum wage and family allowances.
The government's supporters have been forced to keep a low profile during the long pandemic lockdowns.
But pro-government trade unions and social organizations recently announced they would march in support of Fernandez on Wednesday, regardless of the election results.
- IMF debt looms -
Argentina's GDP dropped 9.9 percent last year due to the coronavirus pandemic.
The country has one of the world's highest inflation rates, at 40 percent so far this year, and a poverty rate of 42 percent for a population of 45 million.
"I fear for the economy," pastry worker Oscar Navarro told AFP on Sunday, without revealing his vote.
"Salaries are not sufficient. Whoever wins, it will take a long time for the country to recover."
The government is also in the midst of a tricky renegotiation with the International Monetary Fund over the repayment of a $44 billion debt, originally secured by the Macri government in 2018.
"In this new stage, we will deepen our efforts to secure a sustainable deal with the IMF," said Fernandez.
He said the country needed to get past the "uncertainties that come with unsustainable debt," while creating jobs and reducing inflation.
If Fernandez does not manage to reach a new repayment schedule, Argentina will have to repay $19 billion in 2022 and as much again in 2023.