Cuba’s economy still shrinking, minister says

By Marc Frank and Nelson Acosta

HAVANA (Reuters) – Cuban economy minister Alejandro Gil said on Wednesday that the country’s economy likely shrunk this year and a hoped-for turnaround was still proving elusive in a crisis that has caused increasing hardship and emigration over the last three years.

“It is possible that we will have a contraction of gross domestic product (GDP) this year that could be around 1% to 2%,” Gil told a year-end session of the National Assembly.

That would leave the economy as much as 10% smaller than its 2019 level.

The economy minister had previously forecast 3% growth for 2023. On Wednesday he estimated 2% expansion in 2024.

“We are still in that environment where we have not achieved take-off, the growth that is really necessary to get back to activity levels that we had before 2020,” Gil said.

Cuba, heavily dependent on imports of food, fuel and other goods, blames tougher sanctions first imposed by former U.S. president Donald Trump and the coronavirus pandemic for a steep decline in its export earnings needed to purchase imports. The Communist-run government has also acknowledged market-oriented reforms have moved too slowly.

Cubans have suffered growing shortages of food, medicine, fuel, transportation, power and consumer goods for four years. The economy has slumped as imports, from fuel to spare parts and fertilizer, have all but vanished.

The economy minister said export earnings were $9.1. billion in 2023, compared with the $9.9 billion forecast and $12 billion in 2019. He said Cuba would export $650 million more in goods and services next year. Its principal industries are tourism, pharmaceuticals and health-related services.

Gil did not provide further information on international trade or Cuba’s debt, which the government last reported as $19.7 billion in 2020.

He said inflation was 30%, compared with 38% in 2022, while food prices increased 78%.

“We are paralyzed… We have to look for new ideas, new ways of doing things,” Esteban Lazo, president of the National Assembly, said after Gil ended his report.

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