Did Someone Put a Gun to Their Heads?

President Javier Milei said record household debt delinquency should be resolved between banks and borrowers, ruling out government intervention in private lending agreements. "Did someone put a gun to their heads? he asked during a Sunday interview with LN+ news channel.

Household debt delinquency rose for the 19th consecutive month in May, reaching 12.8% of total household credit, the highest in over two decades. At non-bank lenders like fintechs and digital wallets, the rate exceeds 32%, also a record. Milei said banks and borrowers should negotiate refinancing, and that improving macroeconomic conditions would lower interest rates.

Personal loans and credit card debt have deteriorated sharply since late 2024, reflecting high rates during a run on the peso ahead of the 2025 midterm elections and wages below pre-Milei levels. He blamed the opposition: "It is one of the side effects of the Kirchnerists attacks. He argued that expecting government to solve the problem means passing the bill to everyone else, and that anyone taking on debt is responsible for that decision.

He encouraged refinancing programs offered by banks as private matters. Milei also cited upgrades by three credit rating agencies, saying they would reduce country risk and borrowing costs, leading to lower rates and longer terms. "There is nothing more we can do from the macroeconomic side than what we are already doing, he said, adding that slowing inflation improves financing conditions.

"If I intervene between private parties, I'll have to take money out of someone else's pocket, and I think that's wrong. He noted country risk fell from 1,500 basis points after the election to 420, and that at 500 basis points, the economy could grow 7% to 8%. Meanwhile, CIFRA estimates the minimum wage has lost over 40% of purchasing power since Milei took office, with an initial 30% decline not reversed. At AR$367,800 (US$243.5), purchasing power is 60% lower than in 2015 and 20% below 1990s levels.