At 18, Martín Taborda began studying law at Argentina’s prestigious University of Buenos Aires, hoping to become the first in his family to graduate. Just two years later, that dream has slipped out of reach. Unemployed and $1,300 in debt, he can no longer afford the bus fare from his suburb or the books he needs to keep studying — even at a tuition-free university that has helped generations of Argentines climb into the middle class.
Nearly half of Argentina’s 45 million people owe money, and more than 5 million are behind on payments, according to the Center for City Studies, an Argentine nonprofit that tracks debt using central bank data. Borrowers under 25 have the highest delinquency rate of any age group, at 37.6%. His debt swelled tenfold as interest accrued on missed payments.
Forced to rely on others, he said, “You start to feel like a parasite.” A new wave of household debt is testing support for President Javier Milei among the young Argentines who helped elect him, and offering the nation’s fragmented opposition an opening to rally disillusioned voters ahead of next year’s presidential election. Opposition lawmakers have called a special session of Congress for Wednesday to consider interest-rate caps and other measures to help Argentines renegotiate their debts. Labor unions and debtors planned to protest outside the building during the debate, which strikes at the heart of Milei’s free-market experiment as voters increasingly look beyond his success in taming inflation to bigger concerns about jobs and wages.
Economy Minister Luis Caputo promised at a recent press conference that banks were easing repayment terms, although he added, "We shouldn't confuse empathy with public policy.” On a recent afternoon, Taborda joined a few dozen other students in a classroom at his university's economics school to discuss the emotional toll of their debts. The gathering followed confidentiality rules similar to those of Alcoholics Anonymous. A moderator asked for a show of hands: Who bought groceries in installments?
Who borrowed through payment apps to make ends meet? Who took on debt to repay old loans? Since assuming office in late 2023 promising to break with a discredited political establishment, Milei has slashed the budget deficit and brought annual inflation down from a peak of 289% in early 2024 to about 34% in July.
The greater macroeconomic stability has encouraged banks to lend more, while steep cuts to subsidies for gas, electricity and transport have pushed bills up faster than incomes, forcing many Argentines to borrow just to get by. In the past, wage increases meant to keep pace with runaway inflation could gradually ease the burden of fixed loan payments. Now, slower inflation means smaller pay raises, while borrowing costs remain sky-high under the government's tight monetary policy.
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