HAVANA, Jul 22 (Reuters) – Cuba’s economic growth this year is less than 2% and remains 8 percentage points below pre-pandemic levels, while output in sectors such as agriculture, mining and manufacturing continued to lag, Economy Minister Alejandro Gil said on Saturday.
Speaking to the country’s parliament, Gil said the primary sector, which includes agriculture, mining and other basic manufacturing, was down 34.9% compared to 2019, while output was down 20%. A third sector that includes services such as tourism, communications and education fell 4.9%.
Cuba, which relies heavily on food, fuel and other imports, largely blames US sanctions and the coronavirus pandemic for a drop of more than 50% in its export revenues, which it needs to buy imports, while admitting that market-oriented reforms are too slow in the communist-led country.
Gil said export earnings so far this year were $1.3 billion, 35.7% of what was expected, while imports were $4.4 billion, also well below the Cuban government’s forecast.
The minister said inflation soared by 45% this year, on top of last year’s 39% increase, a figure many economists say underestimates the rate because it fails to take into account a growing informal market driven by scarcity.
Cuba has resorted to tighter price controls to slow inflation, with little success to date, while admitting that other factors are driving up prices, such as low productivity and output.
“If there is no supply and production, we will not achieve effective price control,” Cuban parliament president Esteban Lazo Hernandez said at a session earlier this week.
Gil said the crisis, which has left residents reeling, protesting and leaving the island, was “complicated”, but added that the government was working on solutions.
“The gradual recovery of the Cuban economy has not yet reached the required pace,” he said. “The growth (this year) is very light at 1.8% and also asymmetrical. In other words, it does not occur in productive sectors.”
Additional reporting by Marc Frank; Edited by Paul Simao
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