South American households face rising debt and reduced spending

Economic pressures are driving significant shifts in household financial behavior across South America. In Argentina, a study by Fundación Encuentro indicates that 58.7 percent of urban households required financing to cover basic needs during the first quarter of 2026. This has led to a delinquency peak of 12.9 percent in July. One in three families is utilizing credit cards or informal credit to manage daily expenses, with 20 percent using multiple debt modalities simultaneously. Experts warn of a dangerous spiral where consumers take new loans with high interest rates to pay off existing debts.

In Chile, consumers are adopting austerity measures in response to inflation and economic uncertainty. According to a TransUnion study, 64 percent of households reduced spending on travel, entertainment, and outings over the past year. Looking ahead, 55 percent of consumers expect to continue reducing discretionary spending. Additionally, 48 percent plan to decrease high-value purchases such as vehicles or appliances. To stretch budgets, 65 percent of respondents are increasingly seeking promotions and discounts, while many are shifting toward generic or store brands.