Credit Expansion Fuels Optimism

The resurgence of credit to the private sector continues, marking thirteen consecutive months of recovery. Recent data indicates a significant upswing in lending activity, suggesting renewed confidence in the economy. This growth, while broad-based, is especially pronounced in specific sectors, highlighting evolving consumer and business priorities.

Mortgage Lending Leads the Charge

mortgage loans have experienced the most substantial growth, with a remarkable 14.5% increase in real terms last month alone. Compared to April 2024, this represents a staggering 223.7% surge. This resurgence follows the relaunch of mortgage programs by both public and private banks, effectively ending a period of stagnation that began after the previous management.

This line remains very dynamic despite the increase in the IPC of the month of March, which broke a descending trend of it and can generate concern among the applicants for adjustable or grape operations.

Guillermo Barber, Financial Analyst

While concerns about inflation, particularly the March IPC increase, might temper applicant enthusiasm for adjustable-rate mortgages, the overall trend remains positive. the long-term impact of inflation on mortgage lending will be closely monitored in the coming months.

auto Loans Accelerate Amidst Price Adjustments

Pledge loans, primarily used for vehicle purchases, are also experiencing rapid growth, exceeding 152% year-on-year. Despite automakers adjusting prices, these loans increased by 6% in real terms last month.This suggests a strong demand for vehicles, potentially fueled by both consumer and business needs.

It has been a month of frank recovery for the pledge.Surely the granting of operations on agricultural machinery, has contributed significantly to achieve these values.

Guillermo Barbero, Financial Analyst

The surge in pledge loans might potentially be partly attributed to increased financing for agricultural machinery, reflecting investment in the agricultural sector. This highlights the diverse factors contributing to the overall credit expansion.

Consumer and Business Lending Maintain Momentum

consumer loans continue their upward trajectory, expanding by 6.1% in real terms in April. Over the past year, personal credits have seen a remarkable 267.2% real increase,making them the most dynamic loan category during that period. credit card financing also experienced growth, increasing by 3.9% monthly and 82.4% year-on-year.

Business financing is also contributing to the overall credit expansion. Advances increased by 6% monthly in real terms, representing a 56.1% year-on-year increase. Credits implemented through documents grew by 3.0% monthly, translating to a 113.7% year-on-year increase.

Challenges and Future Outlook

Looking ahead, the demand for credit is expected to remain strong.However,banks may face challenges in sustaining this level of credit expansion,as deposit growth lags behind loan growth. this could potentially constrain future lending activity.

Credit to the private sector will continue its upward trend and we hope increases around 40%-50% In real terms. This implies a slowdown with respect to what happened in 2024, at which time the credit was in past minimums already extent that growth will continue to be softened.

Eliana Gomez Barreca,Moody’s Argentina Analyst

While projections indicate continued growth in private sector credit,analysts anticipate a moderation compared to the rapid expansion seen in 2024. This expected slowdown reflects the normalization of credit levels after a period of historically low activity. The overall outlook remains positive, but careful monitoring of deposit growth and potential inflationary pressures will be crucial.