While it clearly became a problem by mid-2025, it was not until a few months ago that President Javier Milei’s administration began offering explanations for an issue that had already become a topic of widespread debate: record-high delinquency levels.

According to the latest official data, total delinquency on private-sector credit stood at 7.6% in June. By comparison, it was 2.9% in June 2025 and just 1.8% in the same month of 2024.

Delinquency is not only high compared with previous years; it is also high by regional standards.

A report published in August by the Latin American Federation of Banks (Felaban) found that the average delinquency rate in Latin America is just 2.7%, roughly one-third of Argentina’s level.

What do the government and IMF say?

Central Bank Vice President Vladimir Werning said in early September that while credit delinquency had peaked over the previous three months, an improvement should be expected from the second half of the year onward.

He attributed the increase to interest rates, arguing that they had become excessively high in real terms for borrowers who had expected higher inflation or a devaluation following the elections.

Werning said the solution should come exclusively through sustainable refinancing by the private sector, without intervention or a bailout from the Central Bank.

He said banks have sufficient capital to absorb the losses and should avoid continuing to raise interest rates for households to offset the increase........

© Buenos Aires Herald