HAVANA, Dec. 29th (REUTERS) Cuba has forecast economic growth at 2 percent in 2016, down from 4 percent this year but still favorable considering the world economy, Economy Minister Marino Murillo said on Tuesday.
Murillo was addressing the year-end-session of the National Assembly, from which foreign journalists were barred. His comments were reported by official media.
“To grow in the midst of the current world crisis is positive, and 2 percent in 2016 is also favorable,” Prensa Latina news agency quoted Murillo as saying.
The reports made no mention of the crisis gripping strategic ally Venezuela nor the impact of plummeting commodity prices on trade.
Cuba receives more than 100,000 barrels of oil per day as part of an exchange with Venezuela for Cuban doctors and other professionals. Under the deal, Venezuela is protected from falling oil prices, which in turn punish Cuba.
Cuba receives oil on favorable terms from Venezuela and refines and resells some of it in a joint venture with its socialist ally. Prices for refined products are down in tandem with crude.
Venezuela’s economy is among the worst performing in the world as the value of its oil exports has fallen as much as 70 percent over the last 18 months.
Venezuela’s economic crisis has created a cash shortage for Cuba’s Communist government, restricting its ability to trade.
The fall in oil prices has been a major driver of financial markets this year. Oil prices rose about $1 a barrel on Tuesday, but slowing global demand and abundant supplies from OPEC members kept energy markets bearish. Venezuela is a member of the Organization of Petroleum Exporting Countries.
Traders and analysts said the global oil glut would persist into 2016. [nL3N14I1A0]
“Cuba’s trade with Venezuela represents 15 percent of the Gross Domestic Product, half of what the Soviets’ trade represented,” said Cuban economist Pavel Vidal, who studies the country’s economy as a professor at Colombia’s Pontificia Universidad Javeriana Cali.
Cuba continued to receive oil this year, but most likely not all the cash it may have been owed, Vidal said.
Diplomats and foreign businessmen based in Cuba said state companies were cutting imports and seeking longer payment terms from suppliers.
The Caribbean island’s cash flow has also been cut by low prices for nickel, one of its leading exports.