Consumer credit has been declining for 7 months and the growth of loans in dollars is losing strength

Credit as an engine of growth can’t get going, affected by lending rates that remain high compared to inflation, salaries that have not yet been able to recover and a default rate that causes banks to apply more restrictive policies.

Los Loans to the private sector in pesos fell again last month compared to projected inflation. Lines that finance consumption, such as personal and credit cards, presented the worst performance.

“We find ourselves before the fifth consecutive month of decline in real terms of the portfolio: nominal increases are not enough to compensate for the loss in value of the currency due to the effect of inflation. The reasons for this stagnation are found in the portfolios where families and individuals predominate as debtors: personal, cards, pledges and mortgages. Commercial loans managed to achieve a positive real variation this month, explained Guillermo Barbero, partner at First Capital Group.

For their part, LCG economists highlighted: “In May, consumer credit in pesos contracted again, with a real monthly fall of 1.2%, with our projection of a monthly inflation of 2.2; and it has seven consecutive months off. In year-on-year terms, it fell 1.1% in real terms, something that has not happened since August 2024.”

The line of personal loans rose in nominal terms by 1% monthly, the balance reached $21 billion for the accumulated total, presenting an interannual growth of 33.7%, compared to $15.7 billion at the end of the same month of the previous year.

Regarding real variations, there is a monthly fall of 1.4%, and an annual increase of 0.2%.

“With this month, we complete eight consecutive falls in the portfolio level and we revert to the values ​​of the previous year. The confidence of debtors has not yet been recovered and lending entities remain cautious in offering new operations due to the levels of delinquencies experienced in recent months. Until the default situation of the portfolios is regularized, we will not see growth like those at the beginning of last year,” added Barbero.

In contrast, in LCG they highlighted a recovery of commercial loans, which advanced 3.3% compared to the previous month in real terms, that is, discounting the inflation projection for May.

Faced with the weakness of loans in pesos, the Government highlighted the progress of loans in dollars in recent weeks. However, according to LCG estimates, “loans in dollars (without taking into account credit cards) increased 1.8%, about US$ 403 million, slowing down compared to April, when they had grown by about US$ 1,313 million.

The financed balance in dollars of credit cards decreased by 5.6% monthly; The balance reached US$ 737 million for the accumulated total, presenting an interannual decrease of 5.4%, compared to US$ 779 million at the end of the same month of the previous year. The balances of this portfolio remain within the same values ​​as a year ago.

The recovery of credit is also tied to the evolution of bank deposits, which are the raw material with which entities turn to lend. In May, these hardly changed in the peso segment and less growth in the dollarized part of the banks’ portfolios.

“Deposits in pesos grew marginally (0.1% real monthly). Internally, the fall in time deposits (0.9% real monthly) was offset by the rise in demand deposits, which rose 1.2% monthly above inflation,” LCG noted.

Meanwhile, the stock of deposits in dollars increased US$ 139 million, 0.4%, which shows slower growth than it had in April, when it had gained about US$ 420 million.