HAVANA, Nov 14 The year-on-year inflation in Cuba’s formal market stood at 34.13% this October, compared to 39.73% in the same month of 2022,due mainly to increases in restaurants and food, the National Office of Statistics and Information (ONEI) reported this Tuesday.
This organization does not reflect the evolution of prices in the majority and best-stocked informal market on the island, which is more affected by inflation due to its absolute lack of regulation and the severe shortage of basic products in the formal market.
The consumer price index (CPI) increased 1.52% compared to the previous month, specified the ONEI, which puts the accumulated inflation until October at 24.19%.
By category, the year-on-year increase in restaurants and hotels (52.74%) stood out, followed by food and non-alcoholic beverages (42.20%), traditionally the most inflationary items. Next were transportation (35.75%), various goods and services (24.14%), and education (22.56%).
All categories experienced year-on-year price increases, many at double-digit rates, except alcoholic beverages and tobacco, which fell 21.77%. The least inflationary were health (1.07%) and communications (0.49%), sectors controlled by state monopolies.
This strong increase in prices follows that registered in 2021, when the ONEI estimated inflation at 77.33%, and the 39.07% rebound in the Cuban formal market in 2022. There are no alternative CPI measurements to the official one in Cuba.
There is no data on the evolution in the Cuban informal market, where some prices of basic products have doubled in the last 12 months. Some independent estimates put informal market inflation in 2021 at around 500%.
Since Cuba imports 80% of what it consumes, according to UN estimates, the depreciation of the Cuban peso (CUP) with respect to the dollar (the currency with which it is purchased abroad) is relevant in this inflationary spiral.
In the last twelve months, the Cuban currency has gone from 178 CUP per dollar in the informal market to the current 260 CUP, according to the exchange rate prepared by the unofficial media El Toque, which has become a reference index for media and experts.
Cuba has been going through a serious economic crisis for almost three years, something that is evident in the shortage of basic products (such as food, medicine and fuel), the partial dollarization of the economy, a deep depreciation of the peso, prolonged and frequent blackouts and a sharp increase in prices.
The effects of the pandemic, the tightening of US sanctions and errors in national macroeconomic and monetary policy are the main causes of this crisis, which is fueling migration – mainly to the US – and social unrest.