The recovery in consumption is losing momentum due to the credit crunch and wage caution.

The recovery in consumption is showing signs of weakening in some of its key drivers . According to a study by the consulting firm MAP, while the sustained drop in inflation continues to contribute to the recovery of purchasing power, both credit and wages are beginning to lose momentum, complicating the consolidation of domestic demand.

“ Households began to show signs of recovery in mid-2024, but that process is now experiencing ups and downs . Bank financing has lost momentum, and real wage growth has plateaued,” explained Juan Pablo Ronderos , a partner at MAP.

In terms of sectors, durable goods continue to show significant improvements. In the first five months of the year, car sales increased 83.9% year-on-year, while in the first quarter, washing machine sales grew 99.9% and refrigerators 115.5%. These are segments that are primarily concentrated in high-income households.

In contrast, mass consumption—food, beverages, and hygiene products—is just beginning to show positive changes . According to Scentia , the sector grew 5.5% year-on-year in May, but with a monthly decline of 2.2% compared to April. The annualized growth moved into positive territory (+0.6%) for the first time so far in 2025, although it remains far from 2023 levels.

The report also reflects a strong regional disparity. The City of Buenos Aires leads the growth in supermarket sales, but shows declines in car and fuel sales . At the other end of the spectrum, Tierra del Fuego ranks last in almost all indicators, with the exception of brand-new vehicles, where it ranks midway. Oil-producing provinces such as Río Negro and Chubut, on the other hand, show greater growth.

“ Today, it's not enough to look at averages. The economy has become surgical. Premium appliance companies are breaking records, while mass consumption remains stagnant ,” Ronderos noted.

In line with the goal of consolidating the fiscal surplus, the government has been firmly monitoring wage negotiations. The Ministry of Economy is pushing for agreements to remain below 1% monthly, as was recently signed by the Truck Drivers' Union, which agreed to a 3% increase in three quarterly installments.

According to INDEC data, wages have been growing faster than the CPI since March 2024, accumulating a 19.9% ​​increase. However, last March, inflation (3.7%) once again surpassed income (3%), raising concerns that the Executive Branch is seeking to contain by keeping expectations in check.

Household financing is also beginning to show signs of fatigue. In May, consumer loans grew 4.9% in real terms monthly, below the 5.7% average recorded between January and April, and far from the 8.5% growth seen in the last half of 2024.

At the same time, delinquency rates are rising. The Central Bank reported that unpaid credit card balances climbed to 2.8% in March—a three-year high—and personal loan defaults reached 4.1%, the highest level in nine months. More bounced checks and corporate debt deferrals were also reported, with cases such as Celulosa, Grupo Albanesi, and Los Grobo.

Analysts predict that this segmented trend will continue for the second half of the year. High-income earners maintain their purchasing power for durable goods, but middle- and lower-income groups remain heavily influenced by the weight of public services and transportation in their spending basket.

" It's clear that consumption will not be the driving force behind this phase of growth. The government is committed to putting its financial statements in order, stabilizing the macroeconomic situation, and unleashing productive forces. Companies will have to adapt to this new scenario ," Ronderos concluded.