Panorama econòmic

Economic indicators

The Cuban economy is still heavily hindered by the effects of the embargo imposed by the United States. While Washington was expected to loosen its sanctions under President Joe Biden, his approach towards Cuba has been tougher than former administrations. Upon returning to office in January 2025, President Trump promptly rescinded executive actions by the previous administration aimed at easing sanctions on Cuba. He also reactivated Title III of the Helms-Burton Act, enabling U.S. citizens to file lawsuits against foreign companies profiting from properties expropriated by the Cuban government. Cuba's economy suffered severe setbacks in 2024 as important industries like construction and agriculture fell short of expectations. Timber production stalled at 17.6%, cement production only achieved 43.2% of its target, and steel production was null. With shortages in tubers, meat, and vegetables, agricultural output was unable to keep up with demand. Additionally, the country lost a vital export as the sugar harvest was at its lowest historical level. The situation was exacerbated by fuel shortages and weak power generation. According to the Cuban government, the country's economy will grow by 1% in 2025 as a result of increased export earnings, a rebound in tourism, industrial activity, and the stabilisation of the energy system. Recent economic data, however, raise questions about the feasibility of the forecast.

Cuba is not transparent with its public accounts. At the beginning of 2021, the Cuban government implemented a currency and exchange rate unification, which should yield positive results in the long term. In the short term, though, the policy aggravated some economic issues in the country, most notably causing a huge increase in inflation (Cuba ended 2024 with an official year-on-year inflation rate of 24.88%, with prices tripling compared to 2020). The Cuban government anticipates another large budget deficit for 2025, similar to the previous three years. Prime Minister Manuel Marrero reported that the projected deficit stands at CUP 88.5 billion (USD 3.7 billion, at the official exchange rate for legal entities). Since monetary unification, the debt ratio has surged, triggered by a downward revaluation of GDP. Despite a debt restructuring accord inked in 2015, the country defaulted in 2020. Subsequently, a second agreement was brokered with the Paris Club in 2021, enabling Cuba to settle its 1986 sovereign default by 2015.

Despite a low unemployment rate (1.7% in 2023 – World Bank), the living standards of the Cuban population remain very low. It should be noted that while official unemployment rates are low, unofficial estimates are about double the official rate. Additionally, Cuba remains heavily dependent on food and energy imports, as it imports 80% of its food consumption. The country's situation is uncertain, as reforms are giving an increasingly significant role to private companies. This has led to pilfering, a robust black market, and a brain drain.

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