Argentine People Mired in Debt Following President's Austerity Policies
Many Argentines are engulfed in a debt arrears crisis after President Javier Milei, who has been in power since 2023, implemented austerity policies to curb inflation. Millions of people in Argentina are unable to repay their debts amid increasingly dire economic conditions.
Debt arrears among Argentine families, as reported by AFP on Tuesday (18/8/2026), have reportedly tripled over the past year under Milei’s leadership. The surge is recorded as the highest in the last two decades.
Milei, a radical free-market advocate, implemented strict austerity measures that succeeded in curbing inflation. However, on the other hand, the large-scale austerity policies have made it difficult for many Argentines to meet their basic needs.
According to Argentina’s Central Bank, around 5.8 million people have been recorded as having defaulted on debt payments for more than 90 days.
Stagnant incomes, coupled with a cost-of-living crisis — partly caused by Milei’s cuts to subsidies for transport, gas, medicines and other essential goods — have pushed household finances to the brink of collapse.
Several Argentines trapped in debt told AFP about the crisis they are experiencing. One of them is Andrea, a 32-year-old mother, who admitted she feels deeply ashamed when thinking about a loan she took out a year ago and is now unable to repay.
Andrea said she tried to start a new life by launching a catering business after the stationery shop where she worked closed. However, purchasing a new oven instead landed her in serious financial trouble.
“I fell behind on payments, and within a few months, the debt ballooned to the point where I could no longer repay it. The debt soared from 1 million Argentine pesos (Rp 12 million) to 5 million Argentine pesos (Rp 60 million),” she said.
Overall, according to data from Argentina’s Central Bank, around 21 million people out of a total population of 46 million have debt in various forms.
Milei Refuses to Take Responsibility for the People’s Debt Crisis
Responding to the situation, Milei refused to take responsibility and appeared to blame the Argentine people who chose to borrow.
“Did anyone hold a gun to their heads to force them to do it (take out a loan)?” Milei asked in a recent interview.
Separately, the President of Banco de la Provincia de Buenos Aires — a public financial institution and Argentina’s second-largest bank, Juan Cuattromo, rejected the notion that the Argentine people alone should be blamed for being trapped in debt.
Cuattromo told AFP that late debt payments are “not a consequence of individual decisions”, but rather the result of “a macroeconomic context that has worsened incomes, employment and economic activity”.
Milei has been praised for his success in combating high inflation, a chronic problem that has long haunted Argentina. However, the slowing pace of price increases has become a double-edged sword for those who rely on credit, as it means their debts are not being eroded over time.
Longer repayment periods, coupled with swelling bills and stagnant wages, have created an extremely severe crisis for many families.