Household debt defaults are not a threat to Argentina’s economy, given that household debt levels are relatively low compared to other Latin American countries, stated International Monetary Fund spokesperson Julie Kozack on Thursday. “We are, of course, monitoring the recent increase in household delinquency rates. “We are, of course, monitoring the recent increase in household delinquency rates. We do not consider this to pose a significant risk to financial stability in Argentina,” Kozack said at a conference in Washington, responding to journalists’ questions on the issue. “Essentially, what we see in Argentina is that household debt remains relatively low. It stands at around eight percent of GDP in Argentina, which is lower than what we see in many other countries in Latin America,” she added.
Approximately 5.8 million Argentines are classified as being in arrears, indicating that they are over 90 days overdue on their debt repayments, as per the latest figures from the Central Bank. Half are classified as having debts considered uncollectable. The figures indicate the peak level of delinquency observed in the past twenty years. Recent reporting has underscored a significant increase in overdue household loans, especially among lower-income borrowers and users of digital lending platforms. “The banks are well capitalised and liquid, and they have provisions covering more than 85 percent of their non-performing loans,” the spokesperson added.
“Overall, Argentina’s banking system is quite small, and deepening these markets – providing avenues through which credit and savings can be channelled towards investment and opportunities for Argentines – will be very important going forward,” Kozack said. The IMF has consistently voiced its backing for President Javier Milei’s free-market reform program, revitalising the nation’s engagement with the Fund following years of stagnation associated with prior payment defaults. Argentina entered into a four-year agreement with the IMF for an Extended Fund Facility amounting to US$20 billion in 2025. The Fund’s Managing Director, Kristalina Georgieva, conducted a visit to the country in July.
