Cuban minister says there is no quick solution to devastating crisis

Former economy minister Alejandro Gil under investigation for corruption

HAVANA, Jul 22   Cuban Economy Minister Alejandro Gil said on Saturday that the country’s economic growth will be less than 2% this year and remains 8 percentage points below pre-coronavirus levels, while production in sectors such as agriculture and manufacturing lags further behind.

“The gradual recovery of the Cuban economy has not yet reached the necessary pace. Growth is very light, 1.8%, and also asymmetric. That is, it does not occur in productive sectors,” Gil told the deputies to the National Assembly. “The fall is much more accentuated than the recovery.”

Gil stated that the primary sector, which includes agriculture, mining and other basic productions, fell 34.9% and manufacturing 20% compared to 2019, while the tertiary sector, which includes services such as tourism, communications and education, fell 4.9%.

Cuba largely blames US sanctions and the pandemic for a more than 50% decline in export earnings since 2015.

The minister added that export earnings so far this year were $1.3bn, 35.7% of expectations, while imports were $4.4bn, also well below the government’s forecast.

In his report, he also noted that inflation reached 45% this year, up from 39% last year, a figure that many economists say underestimates the rate as it does not adequately represent a growing informal market driven by scarcity.

Havana has resorted to increased price controls to curb inflation with little success to date, while acknowledging that other factors are driving up prices, such as low productivity and output.

“Today the country does not have all the resources to follow the level of imports. Practically one hundred percent of the family basket today is being imported and it is not being produced in the country,” said Esteban Lazo, president of the National Assembly, earlier this week.

The current economic crisis worries Cubans. Some have protested and others have emigrated due to hyperinflation and shortages of various basic goods.

“The government is not stopped,” Gil said. “The recovery achieved in the last two years is insufficient (…) productive activities decrease, which affects the decrease in supply, and the growth of prices.”

Reuters