Argentina’s Household Debt Reaches Nine in Ten Homes as Milei Shelves Tax Reform
ARGENTINA · ECONOMY
Key Facts
—What happened: Nine in ten Argentine households now carry some form of debt, an August survey shows.
—The arrears: Late payments on family debt hit 17.5% in June, almost five times the level of December 2024.
—The real story: Most defaulters owe less than AR$500,000 (US$330), borrowed for food and daily bills, not luxuries.
—The catch: Half of household debt sits outside the banking system, where the central bank’s statistics barely see it.
—The policy shift: The government has shelved its promised comprehensive tax reform and kept it as a 2027 campaign pledge.
—Why no relief: Argentina’s financial surplus after interest payments is just 0.1% of GDP, leaving no room for tax cuts.
Household debt in Argentina has reached nine in ten homes, late payments are climbing at their fastest pace in years, and President Javier Milei’s government has quietly postponed the comprehensive tax reform it once promised for 2026.
Nine in ten households owe someone money
The headline number comes from an August household survey reported by Argentine media this month. Some 92.3 percent of households now register some type of debt.
The burden is concentrated. Of indebted households, 28.4 percent juggle more than three separate debts at once.
Much of this household debt is invisible to officialdom. Around half of it sits outside the banks, in supermarket cards, appliance-store credit and phone-based lending apps that the central bank tracks poorly.
Renters are squeezed hardest. A separate July study found 72.9 percent of tenant households carry active debts, the highest reading in that series.
Arrears are climbing fast, and the debts are small
Late payment is the sharper warning sign. The share of household debt in arrears reached 17.5 percent in June, according to the Debt Map, a study by the Center for Studies for the City with Germany’s Friedrich Ebert Foundation.
The speed is what alarms economists. Arrears were 3.6 percent of credit in December 2024, 12.6 percent a year later and 17.5 percent by June 2026, a near fivefold rise in 18 months.
A second study, from Austral University and the consultancy EcoGo, confirms the figure. Some 35 percent of the overdue stock is already classed as irrecoverable, unpaid for more than a year.
The average defaulter owes AR$1.3 million (US$859), up 58 percent in real terms in a year. More than half owe less than AR$500,000 (US$330), amounts tied to groceries and basic services, says Claudio Caprarulo of consultancy Analytica.
Where you borrow changes your odds. Appliance chains show 48 percent of credit in arrears, non-bank store cards 33 percent and app-based lenders 23 percent, against 19 percent at private banks.
Incomes fell, and the state calls it a private matter
The cause, per the central bank of Buenos Aires Province, is not a borrowing binge. Two of three people now behind on payments were up to date in 2024 and slipped because their real income fell.
The government’s response has been notably cold. Milei said nobody “put a gun to the heads” of defaulters, and central bank chief Santiago Bausili called the problem “a matter between private parties.”
Congress has moved in the opposite direction, without success. The opposition pushed debt-relief bills for families and small firms, but pro-government deputies blocked them this week.
Analysts warn household debt is turning political. A debt crisis, one commentator noted, can start in bank balances and end at the ballot box, and polls show arrears among Milei voters too.
The tax reform that became a campaign promise
Against this backdrop, the government confirmed this week what had been rumored for months. There will be no comprehensive tax reform this year.
The plan now is to hold the redesign of the tax system as a promise for a potential second Milei term. Official sources admit it will reach voters “surely as a promise” rather than as law.
That is a retreat from the government’s own roadmap. The administration had committed to the International Monetary Fund, the Washington-based lender known as the IMF, to present the project by the end of 2026.
Milei himself had raised expectations in March. Opening Congress, he called taxes “theft” and promised a deep cut to make the system serve growth rather than the state.
The reason for the retreat is arithmetic. Argentina’s public sector ran a primary surplus near 0.9 percent of GDP in the first seven months, but only 0.1 percent once debt interest is paid.
July shows the thin margin. The primary result was a surplus of AR$2.96 trillion (US$1.96 billion), but the financial surplus after interest was just AR$244.9 billion (US$162 million).
What to watch from here
The first marker is the next Debt Map reading, due after the September data. A further rise would make the household debt problem harder to dismiss as anecdote.
The second is consumption. Credit expansion has been propping up spending, and that room is now narrow, as the Banco Provincia study warns.
The third is the calendar. Argentina elects a president in October 2027, and both the debt question and the promised tax reform now sit inside that campaign.
Frequently Asked Questions
How many Argentine households are in debt?
An August 2026 survey puts the figure at 92.3 percent of households, roughly nine in ten. Among indebted households, 28.4 percent carry more than three separate debts.
How fast are arrears growing in Argentina?
Late payment on family debt reached 17.5 percent in June 2026, up from 3.6 percent in December 2024, according to the Debt Map study. About 35 percent of overdue debt is already classed as irrecoverable.
What are Argentine families borrowing for?
Mostly for daily life. More than half of defaulters owe less than AR$500,000 (US$330), sums linked to food and basic services, and a provincial central bank study blames falling real incomes rather than excess borrowing.
What happened to Milei’s tax reform?
The government has ruled out a comprehensive tax reform for 2026 and will present it as a campaign promise for the 2027 election. It says public finances, with a financial surplus of just 0.1 percent of GDP, leave no room for structural tax cuts.
What has the government said about household debt?
President Javier Milei said nobody “put a gun to the heads” of defaulters, and central bank president Santiago Bausili called it “a matter between private parties.” Opposition debt-relief bills were blocked in the lower house this week.
Connected Coverage
We covered the blocked relief bills in Argentina’s debt-relief bills blocked in Deputies, what the borrowing buys in household debt pays for food, not luxuries and the political backdrop in Milei’s re-election bid as country risk climbs. More from the country sits on our Argentina hub.
Sources: Nueva Ciudad (21 August 2026), Chequeado (11 August 2026), El Día (21 July 2026), Identidad Correntina (15 August 2026), Diario Panorama (29 August 2026), Primera Edición (29 August 2026), El Cronista (2 March 2026). Exchange rate: AR$1,513.04 per US dollar, open.er-api.com, 29 August 2026.
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