Government launches plan to revive mortgage lending, boost real economy

Economy Minister Luis Caputo unveiled a AR$2 trillion (US$1.3 billion) plan on Wednesday aimed at reviving mortgage lending in Argentina. According to Caputo, the funds would be used to provide housing for 17,000 to 18,000 families. The money will be sourced from the Sustainability Guarantee Fund (FGS), which guarantees long-term deposits at banks to enable them to write more home loans.

The FGS is a sovereign wealth fund overseen by the state pension agency ANSES, acting as a reserve to guarantee pension payments during economic crises or tax revenue drops. Brokerage Puente remarked that the scheme is not new, having been implemented during former President Cristina Kirchner's term in 2009. Caputo highlighted that Argentine mortgage lending's share of GDP is minuscule compared to countries like Chile (27%) and the United States (75%), suggesting vast potential for growth.

The initiative is expected to significantly boost the construction market, which has been severely impacted by the government's freeze on public works, leaving it 20% below its November 2023 level. Construction has lost over 1,600 companies and 80,000 jobs since then. The AR$2 trillion will be allocated through AR$200 billion auctions, with the first scheduled for early September.

Banks are positive about the plan, but some associations remain cautious and demand clarity on the program's scope and fairness in access for all financial institutions.