By Hernan Nessi
BUENOS AIRES, April 13 (Reuters) – Gonzalo Martinez, a 37-year-old teacher, hopes that one day when he opens his bank account, he’ll have no more debt looming over him.
Martinez is one of a growing number of Argentines falling behind on bank loans as shrinking purchasing power – the result of rising inflation and lower government subsidies – pushes household finances to the brink.
Data from Argentina’s central bank (BCRA) showed that household loan delinquencies rose to 10.6% in January 2026, up from 9.3% in December, and just 2.8% in December 2023, when President Javier Milei took office.
Milei has overseen deep “chainsaw” cuts to public spending in order to rein in inflation, achieving Argentina’s first budget surplus in more than a decade. The austerity measures have been met with street protests, https://www.reuters.com/world/americas/argentines-march-demand-increased-education-healthcare-funding-2025-09-17/ including from public university students and retirees who have seen school funding and pensions shrink.
Analysts told Reuters the rise in loan defaults reflects shrinking real incomes, as wage negotiations have lagged behind inflation and the government has slashed subsidies for public services such as electricity, gas and transportation.
“Increases in public service tariffs have been compressing disposable income and, as a result, families’ ability to settle their debts,” said Pablo Besmedrisnik, economist and director of consultancy VDC.
Martinez, who lives in Buenos Aires, said he has accumulated credit card debt as his salary hasn’t adjusted to inflation.
“I expected what I’d be paying on the card to represent a smaller share of my income, but it hasn’t,” he said.
Although annual inflation has dropped significantly during Milei’s presidency – from 211.4% in 2023 to 117.8% in 2024 and ending 2025 at 31.5% – analysts said the improvement has failed to restore purchasing power.
Monthly inflation has edged up https://www.reuters.com/business/energy/rising-fuel-prices-test-mileis-freemarket-gamble-south-america-feels-oil-shock-2026-04-02/, accelerating from 1.5% in May 2025 to 3% in March 2026, according to a central bank market expectations survey released on Wednesday.
“Credit delinquency reflects the income crisis facing families,” said Pablo Moldovan, economist and director at consultancy C-P Consultora.
Nahuel, a 37-year-old public sector employee who preferred not to disclose his last name, told Reuters he took a loan during his vacation and then needed another loan to pay it off.
He currently has five overdue loans.
Analysts expect delinquencies to rise further as higher global energy prices boost inflation.
“There is no sign of a change in trend,” said Moldovan.
Several consultancies and economists warned that delinquency levels on loans issued outside the formal banking system – such as from companies that offer private loans – could be two to three times higher than the figures reported by the central bank.
(Reporting by Hernan Nessi, writing by Leila Miller, editing by David Gaffen)
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