Argentina's Struggle: Why Locals Are Taking Loans Just to Afford Food

Argentina's Growing Crisis: When Basic Necessities Mean Mounting Debt

In Buenos Aires, and across Argentina, a stark reality is unfolding for countless families. Despite working diligently, often holding multiple jobs, many find themselves caught in a relentless cycle of debt just to cover fundamental needs, including food. The once-unthinkable has become a daily struggle: in Argentina, locals are taking loans to buy food.

Consider Diego Nacasio, a 43-year-old salesman in Florencio Varela. For Diego and his wife, both working full-time, their combined salaries barely last until the 15th of the month. After that, the survival playbook kicks in: extra shifts, selling personal items, maxing out credit cards, and securing small loans become the norm until the next paycheck arrives. “I have never experienced anything like this,” Nacasio shared. “For 25 years, our hard work built a home, bought a car, and provided a decent life for our son. Now, with better jobs, we can’t even afford groceries for an entire month.”

The Perilous Cycle of Debt for Survival

Nacasio vividly describes the crushing stress: “Living on credit puts you in a very dangerous cycle. It’s easy to fall behind, then you’re just chasing your tail. Most people I know are in the same boat, living in constant stress and anxiety, feeling trapped.”

His story is far from unique. A report by Argentina Grande, using official figures, reveals that nearly half of Argentines are dipping into savings, selling possessions, or borrowing from banks and relatives to cover essential expenses. Further highlighting the severity, a Fundacion Pensar study found 63 percent of Argentines have reduced activities or services to make ends meet.

Violeta Carrera Pereyra, a sociologist and researcher at the Argentina Grande Institute, underscores the gravity: “The current situation is extremely concerning. It’s particularly alarming to see people with stable employment needing loans not for major investments, but simply to buy food.”

Economic Revitalization vs. Everyday Reality

President Javier Milei, who took office in December 2023, champions an austerity plan aimed at fiscal balance and boosting U.S. dollar reserves through drastic public spending cuts. He claims these measures have revitalized the economy and lifted millions from poverty, a stance supported by the International Monetary Fund, which forecasts economic growth for Argentina in 2026 and 2027 despite record foreign debt.

However, a closer examination of the economic landscape paints a more somber picture. While overall economic activity has seen some increase, growth has been uneven. November 2025 data, for instance, showed growth in banking and agriculture, but sharp declines in manufacturing and commerce, leading to numerous factory and shop closures due to plummeting demand. Food consumption, a critical indicator of household well-being, has dropped by a significant 12.5 percent among independent food retailers.

The True Cost of 'Low' Inflation

Inflation, a constant battleground in Argentina’s economy, has seen a reduction from the record highs when Milei assumed office. Yet, experts argue this has come at a considerable human cost. Controversial measures include suppressing wage growth below the rate of inflation and opening the market to cheaper imports. These policies, while ostensibly taming inflation, have eroded purchasing power for many and forced thousands of local businesses into closure.

Critics also challenge the official inflation figures, pointing out that the consumption basket used for measurement dates back to 2004. It fails to adequately reflect current spending patterns, especially the skyrocketing costs of essential services like electricity and fuel, which have seen price hikes far exceeding reported inflation.

Carrera Pereyra notes that these rapid economic shifts have also widened existing inequalities. “While some sectors are experiencing increased consumption, like property and car sales boosted by import openness, the sales of essential items like food and medicines are declining. This means some can afford more, while others are struggling to feed their families.”

An Obstacle Course of Daily Survival

For many Argentines, day-to-day life has transformed into an intricate obstacle course. Juggling multiple jobs, selling used clothing, seeking assistance from relatives, and even resorting to informal, high-interest loans have become common strategies. Veronica Malfitano, a 43-year-old teacher and trade unionist, experienced a quarter of her salary cut due to public spending reductions. “Grocery shopping has become a job in itself,” she explains. “I team up with relatives to buy in bulk, use my credit card, or get small loans. This month, for the first time, I only paid the credit card minimum. The stress is immense; everyone I know is in the same situation.”

Malfitano’s experience is corroborated by data. Nearly half of all supermarket purchases in Argentina are now made with credit cards, a new record. Correspondingly, both borrowing and default rates have surged. An estimated 11 percent of personal loans are currently unpaid, the highest rate since the Central Bank of Argentina began tracking records in 2010.

Griselda Quipildor, 49, whose household includes her husband, two daughters, and two grandchildren, illustrates this struggle. Despite multiple family members working, money typically runs out by the 18th of the month, pushing them back into borrowing. “At the start of the month, we pay debts and bills, then the money’s gone, and we start borrowing again. It’s an endless, vicious circle. We borrow from everyone we know, and even strangers. It wasn't like this before.”

Seeking Deeper Solutions Beyond Debt

Lucia Cavallero, an analyst and economics expert with Movida Ciudad, affirms that Argentina’s debt problems, though longstanding, are now reaching crisis levels within households. “The proliferation of informal lenders has created a dangerous situation, leaving many people with no other options.”

In response, a political party has proposed legislation to help lower-income sectors unify their loans into long-term payment plans at reduced interest rates. While Cavallero acknowledges the positive aspect of political recognition for the debt crisis, she cautions that this approach largely misses the core issue. “It follows the logic of borrowing to pay off debt. While it might offer temporary relief, deeper structural changes are needed.”

Cavallero advocates for a more sustainable solution: “Just as banks are bailed out, families deserve support. Wages must keep pace with the cost of a basic living basket, so people don’t have to incur debt merely to put food on the table.”

Despite the immense challenges, individuals like Diego Nacasio, caught in this economic maelstrom, often express a sobering sentiment: they still consider themselves fortunate compared to others. This shared struggle highlights the urgent need for comprehensive solutions that address the root causes of Argentina's deepening economic hardship and allow its people to live with dignity.