© Reuters. FILE PHOTO: People stroll on the road in downtown Havana, Cuba, November 21, 2023. REUTERS/Alexandre Meneghini/File Photo
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By Marc Frank and Nelson Acosta
HAVANA (Reuters) – Cuban financial system minister Alejandro Gil mentioned on Wednesday that the nation’s financial system seemingly shrunk this 12 months and a hoped-for turnaround was nonetheless proving elusive in a disaster that has precipitated growing hardship and emigration during 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 instructed a year-end session of the National Assembly.
That would depart the financial system as a lot as 10% smaller than its 2019 degree.
The financial system minister had beforehand forecast 3% progress for 2023. On Wednesday he estimated 2% growth 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 mentioned.
Cuba, closely depending on imports of meals, gas and different items, blames harder sanctions first imposed by former U.S. president Donald Trump and the coronavirus pandemic for a steep decline in its export earnings wanted to buy imports. The Communist-run authorities has additionally acknowledged market-oriented reforms have moved too slowly.
Cubans have suffered rising shortages of meals, medication, gas, transportation, energy and client items for 4 years. The financial system has slumped as imports, from gas to spare elements and fertilizer, have all however vanished.
The financial system minister mentioned export earnings have been $9.1. billion in 2023, in contrast with the $9.9 billion forecast and $12 billion in 2019. He mentioned Cuba would export $650 million extra in items and providers subsequent 12 months. Its principal industries are tourism, prescription drugs and health-related providers.
Gil didn’t present additional data on worldwide commerce or Cuba’s debt, which the federal government final reported as $19.7 billion in 2020.
He mentioned inflation was 30%, in contrast with 38% in 2022, whereas meals costs elevated 78%.
“We are paralyzed… We have to look for new ideas, new ways of doing things,” Esteban Lazo, president of the National Assembly, mentioned after Gil ended his report.
