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🇦🇷 Argentina /Economy & Trade

Wages, credit and investment: five reasons Argentina's economy is growing less than expected

From La Nación · () Spanish

Translated from Spanish and summarized by DistantNews. Read the original for the full story.

At a glance

Analysis Named sources Context piece
  • Market economists cut their forecast for Argentina's 2026 GDP growth to 2.1%, from 3.5% at the start of the year.
  • Economists cited by La Nación point to weak incomes and restricted credit as the main causes, with delayed investment, energy costs and weak tax revenue adding to the slowdown.
  • Registered wages remain below November 2023 levels, while rising loan delinquency has made banks reluctant to lend and pushed personal-loan rates to around 64%.

Argentina's economy is not in recession, but it has lost the momentum expected at the start of the year. The latest Market Expectations Survey published by the Central Bank shows banks and consulting firms now expect GDP to grow 2.1% in 2026, down from a 3.5% forecast several months ago.

Central Bank President Santiago Bausili has acknowledged that the economy is growing “much more slowly” than expected. Economists consulted by La Nación identify two main brakes: incomes that have failed to recover and credit that has stalled. Delayed investment, the energy shock, and weak tax collection are worsening the picture.

Much more slowly

· Santiago BausiliThe Central Bank president acknowledged that economic growth has fallen well short of expectations.

The pressure is most visible in household budgets. Wages did not rise as expected while monthly inflation took longer than anticipated to stabilize below 2%. Real incomes fell sharply through April and have since begun to recover, but slowly, according to Gabriel Caamaño of Outlier. Compared with November 2023, the month before Javier Milei took office, registered private-sector wages remain 3.6% lower. National and provincial public-sector wages are down 16.5%, while registered wages overall are 8.2% below that level.

Until April, real incomes fell sharply, hit bottom, and now that inflation is below two, they are recovering, but slowly.

· Gabriel CaamañoThe Outlier economist described the slow recovery in household purchasing power.

A larger share of pay is also going toward electricity, gas, water, and transport, leaving less for consumption. Matías Rajnerman, an economist at Banco Provincia, said registered real wages had fallen almost 5% since August last year and that employment continued to decline. A possible August inflation reading below 1.8% could offer some relief, but available income is still struggling to grow.

Credit had previously helped sustain consumption despite falling incomes. Personal loans supported spending in the second half of 2024 and early 2025, but that engine has now stalled. Delinquency affects six million users, making banks wary of lending again. Personal-loan rates are around 64%, and private-sector credit is shrinking in real terms. “Banks are not lending in net terms, they are mostly collecting,” Caamaño said.

Banks are not lending in net terms, they are mostly collecting.

· Gabriel CaamañoCaamaño characterized the effect of delinquency on bank lending.
About this summary

Originally published by La Nación in Spanish. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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