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BUENOS AIRES (Reuters) - Argentine President Cristina Fernandez faces a mid-term primary election test on Sunday that will show whether she has enough popular support to push for a constitutional change allowing her to run for a third term in 2015.
Candidates for legislative elections in October will be chosen in Sunday's open primary but, with no competition among candidates on the lists presented by each party, it serves more as a survey on Fernandez's six years in power.
The left-wing leader has delivered steady economic growth and was easily re-elected two years ago. But heavy government spending has fueled annual inflation to over 20 percent, and her combative style has upset investors and many voters in Latin America's third-biggest economy.
Fernandez, 60, says she is not thinking about a possible third term but talk persists that her congressional allies want the constitution changed to allow her to run again.
For that to happen, Fernandez would have to increase her control of Congress in October, when half the seats in the lower house will be up for grabs along with a third of the Senate.
Fernandez's allies would need a two-thirds majority in both chambers to get debate started on permitting a third term.
"She doesn't have that now and she won't have it after October," said Ignacio Labaqui, a Buenos Aires-based analyst for emerging markets consultancy Medley Global Advisors.
"But if the ruling party gets 40 percent or better at the national level, it could still claim to have a strong enough mandate to pressure the opposition into a bargain allowing the third-term amendment."
Investors in government bonds and in Argentina's vast agricultural and shale oil resources are watching the primary vote for signs of whether voters are tiring of Fernandez's interventionist policies and might be ready for a market-friendly leader in 2015.
An overvalued currency, heavy-handed import and foreign exchange controls and Fernandez's decision to nationalize Argentina's private pension system, its main airline and top energy company YPF have all upset investors and trade partners.
The president is sponsoring a list of candidates under her FPV (Frente Para la Victoria) coalition, a branch of the country's dominant Peronist party, in the primary.
The star of the opposition is 41-year-old Sergio Massa, the business-friendly mayor of Tigre, an affluent town known for its picturesque canals in the vote-heavy province of Buenos Aires.
Polls show that Massa's candidates could be Sunday's biggest vote-getters in the must-win province. A strong result could put him in position to run for president in 2015.
The opposition is fragmented but Massa's nascent political machine has dented Fernandez's support. If she fails to get 40 percent of the primary vote on the national level, Argentine bond prices will likely rise on Monday.
"A vote below 40 percent for the FPV could be market positive, indicating the possibility of political change in 2015," said a research note from Barclays.
On the sidelines is Buenos Aires' popular governor, Daniel Scioli. He is officially allied with Fernandez but could step up to represent the FPV and run for president if her candidates do badly this year.
Scioli is seen as more of a centrist than Fernandez and would be embraced by business leaders.
Meanwhile, Argentina's economy is expected to grow by about 5 percent this year despite looming fiscal troubles.
Argentina has strong inflows from soy, corn and wheat exports. But public spending has outpaced revenue as the October vote approaches. Going into the primary, central bank reserves are at $37 billion versus $45 billion a year ago.
Additional reporting by Guido Nejamkis; Editing by Kieran Murray and Xavier Briand