Cristian Dezilio thought the loan he took out to buy his son a used car to get around the suburbs of Buenos Aires was plenty manageable at US$355 a month in pesos.
President Javier Milei’s early policies had opened up access to credit for millions of Argentines. Annual inflation that had peaked near 300 percent had slowed sharply, and the country’s economy was growing anew.
Then, Dezilio fell behind just as everything started to change again.
“The price of chicken went up, the price of a gas canister went up, and my salary started shrinking,” said the father of four. In December 2024, “when I took out the loan, things weren’t so expensive. At the time, I could pay it easily. Now it’s becoming an uphill battle.”
Argentines’ improved access to credit was a notable shift in a nation where it has long been scarce, even if the amount available still lags far behind the rest of Latin America. But a new problem has emerged in the wake of a sharp rise in interest rates, slowing economic growth and rising unemployment at the end of last year: Dezilio is now among the growing number of borrowers struggling to repay debts.
Delinquency rates on non-bank personal loans – from digital wallets to retail cards – climbed to 24 percent in January, according to Central Bank data analysed by Buenos Aires-based firm EcoGo. At the same time, 10.6 percent of households are at least 90 days behind on bank loans, the highest since the Central Bank began keeping records in 2010 and even above levels in neighbouring Brazil, where credit is abundant.
Personal debt now amounts to roughly one-and-a-half times Argentines’ incomes, according to estimates from Sebastián Menescaldi, director at EcoGo.
The trend outlines a sharp contrast between dire personal finances for a growing number of Argentines against a big-picture backdrop marked by two years of economic growth, lower inflation and a hard-earned fiscal surplus. It also explains in part why Milei’s approval rating fell to 36 percent last month, the lowest level of his Presidency.
Credit access for consumers and businesses alike has ranked as another of Milei’s accomplishments. Even while remaining relatively meagre compared to regional peers, it’s doubled to 13.6 percent as a share of gross domestic product since he took office in late 2023, according to Central Bank data.
But rising interest rates across all types of loans last year caught many consumers flat-footed.
For years, high inflation made interest-free payment installments a common strategy to maintain consumer buying power by letting price increases wipe out the value of debt. But that cushion has disappeared as inflation has slowed.
Workers on private sector payrolls, meanwhile, still haven’t seen salaries return to pre-Milei levels in inflation-adjusted terms, while public sector payrolls are 20 percentage points behind.
Even before interest rates shot up, fixed costs like utility bills had more than quintupled since Milei took office, eating up discretionary income. Cuts to subsidies and deregulation of rents, transport and utilities have pushed those expenses to about 22 percent of household budgets, up from 15 percent, according to consulting firm Empiria. And before spending on anything else, about a quarter of income is already going to debt payments.
“Families are starting the month with much of their salary already committed,” said Federico González Rouco, Empiria’s economist.
Dezilio, who works for an industrial hardware store in Buenos Aires, has felt the pain. Late last year, he and his wife closed the convenience stand they ran to complement his salary, a choice he attributed to slowing consumption among working class Argentines. His wife now organises children’s birthday parties.
“People used to buy like it was Christmas Eve every day,” he said. “Now if people buy in town, they just get just what’s necessary.”
That’s in part a result of the uneven growth that has taken place under Milei. Agriculture, mining and financial services, which employ about eight percent of Argentina’s workforce, boomed 17 percent in the final quarter of 2025. But the more labour intensive manufacturing, tourism, trade and construction sectors that account for about half of all formal jobs shrank by three percent, according to Barclays research.
Government figures show companies have cut 200,000 formal salaried jobs, or about three percent of the total, since Milei took office. Inflation hasn’t slowed since last May, and the war in Iran is only driving up future estimates.
On the outskirts of Buenos Aires, in Ezeiza, retail worker Ana Valerio took out a loan in 2024 to help pay for her daughter’s quinceañera, the milestone birthday in Latin America that often beckons a big celebration. Her husband, Darío, had already lost his job when they applied for the loan, and earlier this year he lost another job at a factory.
Valerio’s birthday party debt has been sent to collections.
“That’s when the snowball began to form,” said Valerio, a mother of two who earns US$1,000 a month working at a department store. “It was beautiful. Every time I look at the photos, I think, ‘We did it.’ But I know what it left behind.”
by Manuela Tobias, Bloomberg
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