Milei and the IMF say debt delinquency is no threat to the economy. Experts disagree

President Javier Milei's administration in Argentina has attempted to downplay concerns over record-high delinquency levels in private-sector credit, despite data showing that delinquency on June reached 7.6%, up from 2.9% in 2025 and 1.8% in 2024. The issue has been a topic of widespread debate, as the delinquency rate in Argentina is significantly higher than the regional average of 2.7%.

Central Bank Vice President Vladimir Werning stated that the increase in delinquency was due to high interest rates, which had become excessive for borrowers who had anticipated higher inflation or devaluation after the elections. The IMF also addressed the issue, saying it was monitoring the situation but did not believe it represented a significant risk to financial stability.

Household delinquency has been the sharpest increase, reaching 12.8% in June, up from 5.2% in the same month last year. High delinquency rates restrict access to new credit, which is a key driver of domestic consumption and economic activity. The economic impact of delinquency is significant, with nearly 7 million people currently delinquent on their debts, representing roughly 30% of all people in the traditional financial system.

This has led to a decline in private-sector registered wages and a stall in credit growth and improvements in purchasing power. While the corporate delinquency rate is lower, sectors such as construction and textiles, which have been affected by Milei's economic policies, are showing the highest delinquency rates. To address the situation, some experts propose that the government take a more active role in refinancing, while others suggest that the FGS purchase banks' portfolios of delinquent borrowers to implement recovery policies.