Milei’s Economic Adjustments Lead Households to Increasing Debt Just to Afford Basic Needs

Original article: Ajuste de Milei pasa la cuenta: mayoría de hogares se endeuda para comer y pagar cuentas

In the past six months, the adverse effects of the adjustment model implemented by Javier Milei’s government in Argentina have been reflected in the daily lives of Argentine families, with over half forced to rely on credit to cover basic expenses such as food, utilities, rent, and credit card payments to banks.

According to data gathered by various consulting firms and measurement organizations, 56.4% of families in the southern nation have financed essential expenses with borrowed money in the last six months.

The severity of this situation is highlighted by the fact that in January of this year, 2,663,953 individuals fell behind, lagging three months or more in the financial system. This figure, which marked a peak in the first month of 2026, shows an upward trend where the payment capacity of debtors erodes at the same rate that incomes lose value.

Credit as a «Means of Survival»

The alarming diagnosis concerning household situations was detailed in a report by the consulting firm Zentrix, revealing that most families are unable to meet their monthly basic needs with their incomes.

Specifically, nearly six out of ten families have taken on debt for everyday expenses, and within that group, almost nine out of ten are already facing difficulties in repaying it.

The study titled «Public Opinion Monitor (MOP)» elaborated on this characterization, stating that credit, rather than being associated with investment or increased consumption, predominantly serves to cover basic expenses.

The report cited by Página/12 contextualizes this behavior, making it clear that «rather than being associated with investment decisions, credit has mostly oriented towards meeting basic expenses, in a context where 83.9% stated their salaries do not keep up with inflation, and over half the population struggles to make it to the 20th of each month.»

The primary uses for these loans, both formal and informal, are concentrated on everyday expenses, credit card payments, and settling existing debts. This creates a vicious cycle: new debt is taken on to pay off old debt, while the available capital for food and services diminishes. In this sense, Zentrix cautioned about a paradigm shift in the role of debt within household economics.

«The phenomenon describes a shift in the function of debt: it ceases to be a financial tool and instead becomes a means of survival,» the consulting firm warned in its report.

The adjustment mechanism at the household level, as analyzed by Zentrix, unfolds in four consecutive stages that explain the progression of the crisis.

The first stage refers to the decline in purchasing power, due to inflation that is not compensated by salary increases. The second emphasizes the growing difficulty in maintaining basic monthly consumption. The third stage involves resorting to debt to bridge the gap between incomes and expenditures. Finally, the fourth is linked to the increasing inability to meet these financial obligations, leading to delinquency and the deterioration of families’ credit histories.

The Truth About Argentine Families’ Finances

Alongside the erosion of incomes and the rise in involuntary debt, the opinion study recorded a phenomenon that adds a layer of complexity to the relationship between society and the economic management of Milei’s administration: distrust in official statistics.

According to collected data, 65.8% of the population believes that the inflation figures published by the National Institute of Statistics and Censuses (INDEC— a public agency operating under the Ministry of Economy) do not reflect the reality of their daily expenses.

This perception extends beyond a technical discussion regarding measurement methodologies; it touches a sensitive nerve in the credibility of the so-called «libertarian» government. The gap between the official number and the everyday experience of households has widened in a context where food and utility prices have shown their dynamics, often exceeding the averages reported by the statistical agency.

«It is not just a technical discussion about indices but rather a growing visible gap between the official number and the economy experienced in households,» the Public Opinion Monitor emphasized, directly referencing the distrust generated by inflation’s impact on incomes.

The report further delves into the consequences of this disconnection between statistics and citizen perception, arguing that when salaries lose purchasing power and more than half the population cannot make it to the 20th of the month, credibility in these figures deteriorates not only because of what they measure but also due to what they fail to correct in everyday practice. Additionally, suspicions of political interference in public statistics and perceptions that the baskets or weights used for calculations do not accurately represent real household consumption add to this skepticism.

«If salaries lose purchasing power and over half the population cannot make it to the 20th of the month, credibility in these figures erodes, not only because of what they measure but also because of what they fail to correct in everyday practice,» the consulting firm noted in its analysis.

Lower Middle Class and Poor: The Most Indebted

The impact of the adjustment and the resulting debt crisis is not evenly distributed across Argentina’s social structure. Lower-income sectors, particularly the lower middle class and the poor, show the highest levels of vulnerability to over-indebtedness.

A study from the Argentine Institute of Grande (IAG) provided precise data on the nature of delinquency and revealed a central characteristic: the debts that are in irregular status are overwhelmingly small debts.

According to the report, 50% of individuals in payment irregularity—who have been behind for over three months—owe 484,295 pesos (Argentinian) or less. This contradicts the notion that delinquency is concentrated among large debtors or high-risk operations; instead, it shows that households with lower incomes fall into arrears over relatively small amounts, which are unmanageable given stagnant income.

«The debts that are in payment irregularity are primarily small debts. Nevertheless, it is essential to note that the amounts have been increasing in recent months, meaning that these unpaid debts increasingly burden workers’ salaries, which unlike the debts and interest rates, are not growing above inflation,» the study from the Argentine Institute of Grande detailed.

The number of debtors in irregular status hit a peak in January 2026, with a figure representing a 79% year-on-year increase. This translates to 1,181,718 more people than in January 2025 who have joined the ranks of delinquency. However, the phenomenon is not only explained by a rise in the total number of debtors. Analysts are concerned about the accelerated proportion of delinquents within the total debtor population.

«The total number of debtors is not increasing at the same pace as the number of debtors in irregular payment status; thus, delinquent individuals represent an increasingly larger portion of the total debtors. In January 2026, they constituted 17% of the total debtors, compared to 10% in January 2025,» the entity highlighted. This data confirms that not only is delinquency growing, but the structural inability of households to maintain any financial commitments is deepening.

Deterioration of Milei’s Image

In this context of declining purchasing power, rising involuntary indebtedness, and distrust in official statistics, the poor economic performance has begun to take a toll on Javier Milei’s government image.

Recent popularity metrics from Zentrix reveal the ultraright leader’s approval ratings have plummeted, indicating that in March, public disapproval of his administration reached 53.3%, an increase of 8.3 percentage points from the previous measurement.

Simultaneously, approval of the «libertarian» dropped to 38.5%, solidifying a dominant trend of critical evaluations. This ongoing decline is not coincidental; it is a response to a process of erosion of social tolerance towards the neoliberal adjustments enforced by Milei and his ministers.

The consulting firm’s report indicated that this «social tolerance» is diminishing as the adjustment stops being a macroeconomic projection—an abstract concept tied to fiscal deficits or Central Bank reserves—and instead starts to be felt directly in households’ pockets, reported Página/12.

The convergence of personal hardship and negative evaluations of the country’s direction has created a critical scenario for presidential management.

The Zentrix report concludes that citizen perception no longer distinguishes between the government’s macro goals and the microeconomic consequences in everyday life. For the majority of Argentines, the adjustment is no longer a promise of future stability but a present reality expressed through difficulties in filling grocery carts, paying credit cards at month-end, and avoiding mounting delinquency.