The Spanish Socialist Workers' Party suffered significant losses in regional elections on Sunday, winning merely three of the 12 regions where the vote was held.

The party of Prime Minister Pedro Sanchez, also known as PSOE, ran 10 regions before the latest vote.

The conservative opposition Popular Party (PP) secured significant gains in the elections, hinting that the right might come on top in the country's coming general elections, slated for December this year.

The PP won 31.5% of the votes, while the PSOE secured 28.2%, as per Interior Ministry results shared after counting over 97% of the votes. 

What do the results mean?

The conservative party managed to dominate the vote in some regions which had previously seen a PSOE majority. They include Valencia, Aragon and La Rioja.

"Spain has started a new political cycle," the French AFP news agency quoted PP President Alberto Nunez Feijoo as saying. "It is the victory of another way of doing politics." 

Analysts believe the PP's strides in the regional election could pave the way for a right-wing take over during the general election.

Sanchez needs strong turnout

The stakes are high for Sanchez, whose Socialist party governs Spain, the eurozone's fourth-largest economy, in coalition with the far-left Podemos.

After five years in office, the prime minister faces voter fatigue at a time of soaring inflation and the resulting drop in purchasing power.

He has also struggled to contain the fallout from repeated crises that have shaken his left-wing coalition.

The shift to the right in the regional elections give PP leader Feijoo an edge that could see him replace Sanchez as he goes into campaigning for the general election in the fall.

Campaign fighting over economy, party factions

Feijoo has pushed hard to turn the regional vote into a referendum on Sanchez.

He has denounced the prime minister for not only pandering to the far left, but also to the Basque and Catalan separatist parties on which his minority government has relied for parliamentary support.

But Sanchez defended his record on the economy and managing Spain's water resources amid a prolonged drought.

"Social democratic policies suit Spain a lot better than neoliberal policies because we manage the economy a lot better," he said.

New leftist alliance could weaken Socalists

The Socialists also face a growing challenge from the newly-formed left-wing Sumer alliance of popular Labor Minister Yolanda Díaz.

Another key indicator on Sunday was the performance of Isabel Díaz Ayuso (PP), the regional head of government in the Madrid region.

The feisty 44-year-old, dubbed the "Spanish Trump" by the media, managed to secure an absolute majority, an element missing in most other regions.

Two-party system back?

The elections could also mark the beginning of a return to a two-party system dominated by the Socialists and PP.

Over the past decade, smaller parties such as Podemos and the centrist Ciudadanos have played kingmaker roles, but both may struggle to reach the 5% vote to qualify for representation in many regions.

Campaigning has been marked by several controversies, from allegations of voter fraud in small towns to an unprecedented case of kidnapping.

rmt, mm/fb (AFP, dpa, Reuters)