Argentina is facing a significant rise in credit delinquency, reaching 5.5% of the bank portfolio, the highest level recorded in six years. This increase is attributed to a continuous upward trend, with a concerning rise of 0.3% in December alone. In stark contrast, delinquency rates were merely 1.5% at the end of 2024, indicating a drastic deterioration in financial stability for borrowers, particularly amidst rising inflation, stagnant economic activity, and declining employment rates.

The impact of this surge is most pronounced among personal loans, where delinquency rates have doubled, signaling more significant hardships for families. As income levels remain low and the cost of living rises due to increased tariffs and fees, many families are struggling to meet their financial commitments. The family delinquency rate has skyrocketed to 9.3% in December from just 2.6% a year prior, highlighting a crisis of affordability as household expenses continue to escalate.

These trends not only reflect the current economic challenges faced by many Argentineans, but they raise serious concerns for the financial sector as a whole. With more borrowers unable to repay their debts, banks may face increased risks and potential losses, leading to tighter credit conditions that could further stifle economic growth. Policymakers will need to address these underlying issues to stabilize the financial landscape and support struggling families in the months to come.