Bank loans are usually a good gauge of activity. Last year, due to an economic slowdown, but mostly to an extraordinary increase in interest ratesall lines offered by Argentine banks fell above inflationIn real terms, credit to the private sector it contracted by 14% in 2022after also closing the previous year down.
Argentina becomes like this one of the countries with the lowest employment-to-GDP ratio in the region. The decline in credit affects households and businesses, which due to high inflation and the increase in the reference rates of the economy, they have lost the “paying” power. in front of the banks.
Given the price increase and exchange rate volatility that occurred in the middle of last year, in the context of the peso debt crisis, the Central Bank abruptly raised the reference rates of the economy. The the last adjustment was in September 2022when he took the yield of Leliq at 75% per year, implying an effective rate of 107%.
This set the stage for an all-credit line collapse scenario. Last month, peso loans to the private sector barely grew above inflation, an increase of 0.2 in real terms. So they racked up another year of setback, with a real drop of 14%. from the levels they saw in December into 2022.
In the year-on-year comparison, theConsumer loans have been hit the hardest: the stock of pesos allocated for this purpose in banks decreased by 16%, discounting the inflation accumulated in 2022. the case of personal loans such as credit cards.
“Consumer Credits seem to have stopped their contractionary momentum, December was the second month in which growth was observed in real terms, of 0.7% month-on-month real,” they explained to the consultancy LCG, “ The impetus came from credit cards, which grew by 2% real per month, while personal loans contracted by 1.6% real per month.”
The loss of purchasing power and household debt worries the government. The Ministry of Economy has anticipated that during this month measures to stimulate consumption will be known, especially in the medium and low sectors, where they note that the debt capacity “is at its maximum”.
As well as a possible rate reduction for these segments, which is being studied together with banks and credit unions is to change the entry requirements. Also on the table is the idea of relaunching a refinancing of outstanding credit cards, as happened during the pandemic.
For Guillermo Barbero, of Fist Capital Group, there are several factors that mainly explain the decline in the use of plastic when it comes to financing family expenses.
List: “The failure to update the installment limits of sales and the consequent depletion of the same due to their use in the previous months; the increase in rates that make the cost of the operation more onerous for financial institutions; the financial situation of consumers motivate them not to increase family debt; activities that cannot be financed through cards or see an increase in their financial cost”the barber said.
For their part, secured loans, including pledged and mortgage loans, closed the year with a 16% reduction compared to 2021. On the corporate side, the outlook is no longer encouraging. In annual terms, they have contracted by 11% in relation to the accumulated inflation.
Forward. no matter how much the Central Bank decides to cut rates since JanuaryIn light of a slowdown in inflation which could be confirmed with the latest data for 2022 which INDEC will publish next week, no improvements are expected.
“A scenario of lower activity such as the one we expect for the year will have a direct correlation on credit dynamics and to this will be added a higher cost of financing due to the rise in interest rates. During the year there could be periods with a better momentum thanks to isolated consumption promotion policies such as “Now 30″,” they stressed in LCG.
NS
Source: Clarin
