Daniel Zaga, Deloitte Economist: "Delinquency could improve until early 2027 and then worsen due to political issues"

For Daniel Zaga, Chief Economist at Deloitte Spanish Latin America, the sharp increase in delinquency does not yet constitute a "macrostructural" problem, although it does reflect the difficulties for economic stabilization to reach the entire society.{#p-1786813033615-46933}

The economist from one of the major global auditing and consulting firms stated that the deterioration could moderate in the coming months if nominal wages manage to grow above inflation, but warned that the electoral scenario could put pressure on it again: "Delinquency could improve until early 2027 and then worsen due to political issues," Zaga understands.{#p-1786813041197-32773}

In a dialogue with Ámbito, he highlighted that the economic program has achieved significant advances in fiscal, exchange rate, and reserve matters, and considered that "at the macro level, almost everything that needed to be done has been done".{#p-1786813033615-19371}

However, he pointed out that the pending challenge is for those results to reach people's pockets, employment, and wages, for which he called for a productive development policy to accompany the economic transition.{#p-1786813375115-35448}

From his office in Mexico, he also responded about the trajectory of the exchange rate and warned that if it comes under pressure again by mid-year, "it is likely that rates will have to be raised".{#p-1786813117190-59038}

"In Argentina, there are unprecedented macro changes; the problem is the political timing" {#p-1786813994304-82683}

Journalist: I remember that the consulting firm, in November 2025, was wondering if this time the model could be different. Is this still the case?{#p-1786809390544-64645}

Daniel Zaga: I believe that in Argentina there are unprecedented macro changes in the last 100 years. I am not talking about politics: I am talking about Vaca Muerta, mining, and copper. There are new resources that can strongly help the macro.{#p-1786809390544-43629}

Another change is the inflation anchors. After hyperinflations, governments used a fixed or semi-fixed exchange rate to control prices. Now the main anchor is fiscal, not necessarily monetary. In convertibility, we had an exchange anchor, but without fiscal responsibility, and sooner or later it ended up exploding.{#p-1786809390544-74793}

The problem is the political timing. For the change to benefit the entire population, four years is difficult. Most people think about their pockets: if inflation decreases and the economy is organized, but that does not impact there, we have to see how long it holds.{#p-1786809390544-45694}

So, it can be different because of the fiscal anchor, lithium, copper, and Vaca Muerta, but we have to see if the political timing allows it because there are elections next year.{#p-1786809390544-43187}

From the outside, the following is seen: country risk has fallen, the exchange rate has stabilized, and reserves have increased. But activity is growing little. Until May, the economy accumulated 1.7%, against almost 3% from the REM or various consulting firms. Growth remains low, and inflation would just be matching wage increases; the situation remains difficult.{#p-1786809390544-87567}

"I don’t know if the Government, being an election year, will try to reduce a bit the fiscal strength" {#p-1786814025265-89467}

Q: What is the margin of action for society to arrive a bit more comfortably at the election year without breaking the principles of the economic program?{#p-1786809390544-69628}

D.Z.: It is difficult. I don’t know if the Government, being an election year, will try to reduce a bit this great fiscal strength thinking about the voters.{#p-1786809390544-97640}

It is rational to think that the Government, in order to last four more years, will slightly adjust the fiscal side. This can be dangerous and distort the balance. However, if it is not done this way, it will be difficult. The balance is very delicate. At the macro level, I believe that almost everything that needed to be done has been done.

Q.: How do you see the recovery of salaries looking towards 2027?

D.Z.: Moderate. We were coming from an inflation rate of over 200% when Milei took office, and now it is below 2% monthly. It was difficult to drop below that threshold, and there are still delayed tariffs and prices to be released.

We hope that inflation starts to fall below the increase in salaries and that there is some recovery of real wages. But time is short: starting in March next year, at the latest, uncertainty begins and the exchange rate may rise a bit.

If we are in August, we have at most half a year to achieve tangible results and for this to last four more years beyond next December.

"The dilemma is how to balance, in the long term, a manufacturing industry that is declining in participation but was very inefficient."

Q.: How much could salaries recover?

D.Z.: I couldn't give you a number. If inflation is above nominal salaries, that completely affects the recovery. This is where we need to think differently. The Government knew that opening imports would harm the manufacturing industry. So far this year, there has already been a contraction of almost 3% in manufacturing production, where many jobs are generated.

Energy and mining are starting to compensate for that decline, but they do not necessarily generate as much employment. The dilemma is how to balance, in the long term, a manufacturing industry that is declining in participation but was very inefficient. Consumers pay for that inefficiency in prices, although jobs are also lost. It needs to be compensated.

Unemployment rose slightly: to 7.8% in the first quarter, up from 7.3% at the end of last year. It is rational, although not desirable. The question is how to compensate for it in the medium and long term.

It will be key to think, give signals, and implement certain industrial policies, but not understood as producing all the computers or cars in the country. Argentina is not Mexico, which exports 90% of its cars and a large part of its manufacturing to the United States. Argentina can export to Brazil, but being a strong international manufacturing producer does not make sense.

We need to focus on new industries, agriculture, and the tertiary sector, which represents the majority of the economy and employment. That is the point for Argentina to emerge stronger both macro and micro.

I would speak of an industrial policy as an economic development policy, identifying key industries that generate employment and should be promoted. And promoting is not just about money and subsidies: it is about concertation between the public, private, tertiary sectors, and universities for a long-term productive development policy. That is what is lacking today. The macro has stabilized, and I believe this Government has done it extremely well.

Q.: That is, state intervention, even if it is smaller and more efficient, must organize this transition...

D.Z.: Obviously. The Government is still present: it is very much involved, although with less participation. Organizing the economy does not mean letting the free market do whatever it wants; seeking fiscal surplus and implementing the RIGI or the new RIGI either.

"We need to outline steps for five to eight years so that unemployment and social discontent do not continue to rise" {#p-1786814260753-61888}

P.: It is not about the state disappearing, but about reorganizing resources. Industry, commerce, and construction drive consumption and employment and occupy a large part of production. How can we ensure they find their place in the transition? Perhaps not everyone should find it, but it is hard to see where it is going.{#p-1786809390544-85950}

D.Z.: Absolutely. Liberalization was very necessary: prices had to be lowered because, otherwise, the consumer pays. But it must be done carefully, as unemployment can rise significantly and politically you could also face a backlash.{#p-1786809390544-59882}

The country lacks a short, medium, and long-term productive development policy - not an "industrial policy," as it can be misinterpreted - to grow sustainably and equitably.{#p-1786809390544-75100}

Perhaps in some manufacturing industries, tax relief should be more gradual so that the unemployment generated does not remain without alternatives. We need to outline steps for five to eight years so that unemployment and social discontent do not continue to rise. Not only for a political objective but to ensure the impact reaches all of society.{#p-1786809390544-93000}

P.: Regarding the level of delinquency: the Government states that it is a private matter; other economists link it to errors in monetary policy, loss of purchasing power, and increased weight of public services. When it grows so much, is it just a private matter or do you also see it as a macro problem?{#p-1786809390544-50682}

D.Z.: I do not see a macrostructural problem, but it does reflect that macro benefits are not permeating all of society. Historically, the currency depreciated, one took out a loan, it was diluted, and then it was easier to pay. Now inflation has decreased significantly, those loans are no longer diluted, and the debt has a greater real weight. It is a consequence of macro restructuring. While moving from macro to micro, there is a lack of productive development policy.{#p-1786809390544-78838}

I would not consider it merely a private matter, as the public sector intervenes in the entire economy. It should be seen as something general, including the public sector. If the economy improves and inflation continues to decrease, delinquency should not necessarily rise. But there is one year left: a strong decrease is difficult, and it is likely that after improving, it will worsen again from March or April.{#p-1786809390544-68525}

I do not see it as something structural. This has also been the case before: three or four years ago, the situation was not much better. Restructurings lead to changes like these.

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"As long as there is no spillover from macro to micro, we will continue to see high delinquency rates" {#p-1786814311987-3295}

P.: Family delinquency in financial institutions is at 12.7%, but in non-financial ones - virtual wallets and others - it rises to 33%. Low-wage or informal workers access credit with fewer requirements but greater demands. Is this typical of Argentina or does it also happen in other countries?{#p-1786809390544-64279}

D.Z.: With informality exceeding 55%, those accessing credit outside a consolidated bank face much higher rates. As long as there is no spillover from macro to micro, we will continue to see this. I would not consider it structural. It is likely that these delinquency rates will remain until the elections, with some improvement in a few months and then a new deterioration.{#p-1786809390544-578}

P.: How could it improve?
D.Z.: It could improve by early next year with nominal wages growing above inflation, but due to political issues, it could worsen from March until the end of the year.
If there are four more years of continuity, you can see if it is really structural. I don't believe so: political times are limited and it is difficult to have time for benefits to transition from macro to micro. It can be done, but there is little margin left.
P.: So, delinquency could decrease until the end of 2026 and rise again during the electoral period. Do you attribute this to the rate? With the rate hike in mid-2025 to contain the dollar and inflation, many ended up in the current situation. Could this happen again in 2027?
D.Z.: Absolutely. Greater uncertainty, higher rates. If the exchange rate is pressured next year, especially towards mid-year, it is likely that they will have to raise them.
P.: The exchange rate discussion will be contentious again towards the middle of next year. Although there are bands, the Central Bank uses different instruments to keep the exchange rate within a certain range. Without putting a number, do you see the current value as sustainable looking towards 2027?
D.Z.: We must remember what happened in recent years. In the midterm elections, there was a lot of political uncertainty, the United States government supported Argentina, and we had a relatively strong peso. Until a few months ago, it remained quite strong.
In election times, there will be much variability according to the polls. When Milei won last time, there were unexpected changes towards the end.
The Central Bank has more reserves, but in the face of that uncertainty, the support from the United States, as important as it was, will continue to be so. This must also be considered geopolitically.
P.: What you mention about the United States is key, because that resource cannot be abused either. Within Latin America, which country do you think this model resembles? Is there a common thread?
D.Z.: Clearly, Chile or Peru, which depend heavily on a commodity. Argentina would no longer depend on just one, but is moving towards the primary sector. I would also expand the comparison to Canada or Australia: they moved towards the primary sector and complemented it with the tertiary. With manufacturing, we need to see what to maintain and what not, and how to gradually implement tariff relief to protect jobs and eliminate inefficiencies. It's a big debate.
Perhaps we need to change the question: more than how Argentina can grow with a strong industry, how can a traditionally developmental country grow without losing jobs or wasting important resources, because then balance of payments bottlenecks appear. The energy trade balance was below $7 billion and is now above $10 billion (in the accumulated last 12 months). It's crazy: you can't waste it. We can resemble Chile, but without neglecting employment, because manufacturing does not generate the same jobs as other sectors.
P.: Some economists observe that Argentina has, in some aspects, better social indicators than other Latin American countries. How is that preserved in this transformation?

D.Z.: I agree. Both inside and outside Argentina, people are asking: "Has there been a total paradigm shift? And what about the social aspect?" You can't lose the social aspect, but you also can't distribute if you don't have it. We need to find that balance. How do we move towards countries like Chile, which supported that "golden goose" without killing it and without jeopardizing employment? It's a great challenge. You need planning and implementation. That is still halfway done in this Government.{#p-1786809390544-99387}

P.: When one looks at developed countries that are often taken as examples, they find investment in education, research and development, infrastructure, and even cultural issues. Is it necessary to see what the Government plans to do with areas that may not currently be on the agenda but are important in the long term?{#p-1786809390544-41396}

D.Z.: Without a doubt. You also can't cut what will generate more income in the medium and long term. You can't kill the golden goose, but you need to complement it. I believe that in recent decades we have killed it: let's not kill it.{#p-1786809390544-34971}

That complement cannot come at the cost of increasing inflation and making ourselves inefficient. I saw it from here: you go to Argentina and cars, computers, everything cost double. That can't be.{#p-1786809390544-84919}

"We must continue to send signals of certainty to take advantage of the next six months" {#p-1786814399344-18390}

P.: What conditions do you think remain for Argentina to access international credit markets?{#p-1786809390544-43815}

D.Z.: One is time, because elections are approaching. There is also the issue of delinquency, associated with high rates that people cannot pay. They need to be lowered for recovery to continue. Everything comes together. I believe that almost all necessary policies have been implemented. One last point: the economy moves by certainty or uncertainty, not just by today's data, but by the signals that the Government and the economy give about what will happen.{#p-1786809390544-29324}

It is important to deepen the Government's laws in Congress and the ideas towards stronger and more inclusive growth, to provide certainty and reduce risk. Reserves have increased, rates have decreased, and I believe the Government has done what it can. Inflation must continue to decrease.{#p-1786809390544-68737}

The country has a few months for inflation to decrease and for there to be greater growth. I would summarize it as continuing to send signals of certainty to take advantage of the next six months.{#p-1786809390544-36509}

P.: Caputo said that entering international credit markets is a possibility, but not an ultimate goal. Do you agree that it could take a back seat or would you prioritize it?{#p-1786809390544-70488}

D.Z.: I wouldn't prioritize it. I think it's valuable to say: "At these rates, I don't want to put my country in debt." It would be easy to say: "The risk has decreased a lot, let's go into debt." That position seems reasonable to me. It would be great if the country risk continues to decrease.