Argentine Families Go into Debt to Buy Food Amid Economic Crisis

Argentine families are falling deeper into debt, struggling to afford basic necessities like food and utilities, a trend exacerbated by a sharp decline in purchasing power since President Javier Milei's administration began. Many households now rely on borrowing simply to manage essential monthly expenses.

Data from the Central Bank of Argentina reveals a dramatic increase in loan delinquency rates. In March, the non-performing loan ratio for traditional bank loans reached 11.5%, more than tripling from 3.3% a year prior. The situation is even more acute in the digital lending (fintech) sector, where delinquency hit 30.5%, up from 20% in the same month last year.

This surge in debt, primarily from credit cards and personal loans, is driven by two key factors: a significant erosion of real wages and stubbornly high interest rates. While prices have risen over 300% since November 2023, wages have not kept pace. Registered workers have seen an average real wage drop of 13% by February 2026, with public sector employees experiencing a steeper decline of 22.1% compared to the private sector's 8% fall, according to a report by CIFRA.

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For the 10th or 15th of the month, I normally have to borrow money just to buy food and pay basic expenses.

The rising cost of essential services like electricity, gas, water, and transportation has placed immense pressure on household budgets. Public utility expenses for a Buenos Aires household have reportedly surged by 800% since Milei took office. Consequently, utility bills now consume 42% of household income, up from 38% in December 2023, forcing families towards non-traditional credit channels.

Government officials have pointed fingers at both lenders and borrowers. Central Bank President Santiago Bausili blamed banks for issuing a "blind wave of credit" without proper risk assessment. Meanwhile, Economy Minister Luis Caputo suggested that individuals overextended themselves with high-interest loans, expecting inflation to devalue their debts, a strategy that failed as inflation slowed. Caputo noted in a television interview that people borrowed excessively at very high rates, anticipating inflation would dilute their debts, which did not happen.

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Banks were not accustomed to this, and people were over-borrowing at very high rates, thinking inflation would dilute the debts, and that did not happen.