According to Cuban economist Pedro Monreal, official retail trade data on the island for 2022 offer a “devastating” panorama and remove “any vision of an alleged economic recovery underway.” The expert has analyzed the collection from the sale of food discounting inflation and the result could not be more discouraging: the drop is two-thirds compared to the previous year, a 2021 that was not exactly a good year.
Monreal focuses exclusively on a message thread published this Monday on Twitter, in food sales and it does so precisely because, as he explains, “they are ‘inelastic’ goods, which in the language of economists means that demand tends not to be significantly affected by price variations”, since the People cannot stop eating and continue to buy, albeit in smaller quantities, whatever the price of the products.
“An annual drop by two-thirds of ‘real’ retail food sales is no small matter […] and reveals an important dimension of the brutal ‘adjustment’ of consumption and aggregate purchasing power in Cuba”
At first sight, and without discounting inflation, pasta, fish products, bread and a few other items seem to obey the “inelasticity” rule, since sales of the first item (pasta) have risen in 2022 85.5%, the second 14.8% and the third 2.9%, compared to the previous year. On the other hand, the other products have suffered falls of up to 25.8% in the case of sugar or, even worse, 28.4% for milk derivatives.
The reality, however, is different and much more worrisome. When official inflation registered in 2022, 63%, is taken into account, we see that the value of pasta sales, which seemed to be in good health, have collapsed 31.4%, and this indicates an equivalent fall of real consumption by Cuban families. This resounding drop in consumption is reflected even more strongly in other foods: fishery products (-57.5%), bread (-61.9%), rice (-63%), meat products (-69.8%) , sugar (-72.5%) and milk derivatives (-73.5%).
“An annual drop by two-thirds of ‘real’ retail food sales is no small matter […] and reveals an important dimension of the brutal ‘adjustment’ of consumption and aggregate purchasing power in Cuba, with the cost of the adjustment concentrated in workers and retirees,” concludes Monreal.
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