Argentina to channel pension funds into mortgage lending push

Argentina's government has announced a plan to inject funds from the country's social security reserve into the mortgage market, aiming to expand access to first-home loans.

Economy Minister Luis Caputo said on Wednesday that an amount equivalent to $1.3 billion from the Sustainability Guarantee Fund (FGS) — which manages pension system resources — will be placed in fixed-term deposits at banks, with the condition that the funds be used for mortgage lending.

Caputo said the initiative could provide housing solutions for approximately 17,000 to 18,000 families, calling it a significant boost for the housing market and the broader economy.

The announcement comes at a time when Argentina is grappling with rising loan default rates. Central Bank data shows defaults have grown for 20 consecutive months, with 17.5% of credit in default as of June — the latest official figure available.

Government officials attribute the trend to a "lack of financial culture" among borrowers who now have access to new financing sources beyond traditional banks. The administration has declined to intervene in what it describes as a matter between private parties.

Last week, a group of debtors protested in downtown Buenos Aires, saying the refinancing plans offered by banks carry interest rates they cannot afford.

Caputo also addressed the broader economic picture, saying per-capita growth is occurring for the first time in four presidential terms, with GDP, consumption, and exports — including from small and medium-sized enterprises — at record levels.

In remarks about political risk, Caputo said markets see a very low probability of economic collapse, but warned that a return of the opposition Kirchnerist movement would be viewed as "returning to hell," adding that Venezuela would seem like "Disneyland" compared to that scenario.