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Crisis, decline and recession: the hidden figures of the Cuban economy

Madrid Spain. — At this point in the year, uncertainty is growing about the true magnitude of the disaster suffered by the Cuban economy in 2021, the year of the Ordering Task. It is known that inflation, with an increase of 77.3% in December last year, suddenly altered the living conditions of the population, creating additional problems of shortages and shortages. An inflation that was fueled by the determination of the communist leaders to apply an inopportune, inefficient and poorly designed economic policy and to do it at the worst possible moment.

It is known, based on loose statistics published by the National Office of Statistics and Information (ONEI), that the main sectors and activities of the Cuban economy (tourism, passenger transport, merchandise, agricultural production, manufacturing, housing, etc. .) recorded levels lower than those of years prior to the pandemic, and in the specific case of agriculture and livestock, all productions plummeted, except for tomatoes. Only the activities of the budgeted sector linked to the expansive management of public spending experienced some improvement at the cost of a disproportionate expansion of the deficit and indebtedness, accentuating the already existing economic lack of control.

But now, when practically half of 2022 has passed, the communist regime continues to hide the statistical data of the economy in 2021, data that could be analyzed with the quarterly GDP publications, which were stopped abruptly in September 2021, without the timely closing of the financial year. Until the third quarter of that year, the Cuban economy was doing poorly, chaining a new drop in GDP of -1.2% on annual average, which would have been the final result if the year had ended in September.

This result was obtained from the combination of a very negative first quarter, in which the GDP fell -13.9%, a more dynamic second quarter, with 7.9% growth, and again a slowdown in the third quarter, with 2.4% growth, which surprised analysts. It seemed evident that the Cuban economy was not benefiting, like others in Latin America, from a rebound effect from the pandemic. The mandatory application of the Ordering Task had prevented it.

The question remains in what happened at the end of the year. The communist regime maintains the most absolute information darkness, and although it is stated that the ONEI published the GDP variation data for the fourth quarter of 2021 in mid-May, that publication has disappeared from the agency’s website, which, for now , only provides the data already cited up to September.

The mystery could not be greater. Possibly, the Cuban communists have intentionally delayed the publication of the data because they know they are very negative, in an attempt to renegotiate new deferrals of the foreign debt with the paris club, or with Russia, grateful for the support received from Cuba in international forums, despite the humanitarian disaster of the war in Ukraine. Whatever the reason, doubts about what happened in the third quarter of last year weigh like a heavy burden on Castro’s leaders.

However, two publications have piqued the interest of some analysts. ECLAC, in the Statistical Yearbook for Latin America and the Caribbean, has announced that, in its 2021 estimates, the Cuban economy grew by 0.5% per year. Recently, my colleague Pedro Monreal released the estimates of the prestigious Economist Intelligence Unit, with a different figure, -0.2% annual change in GDP resulting from a timely review of the one carried out by the organization in the month of March, when estimated a positive 0.1% GDP growth.

The difference between the two figures is not trivial. That of the EIU indicates that in the fourth quarter of 2021 the Cuban economy barely grew by 0.7%, a figure lower than that registered in the previous quarter and close to stagnation. On the contrary, ECLAC data indicate that the Cuban economy had a much more favorable performance in the fourth quarter, reaching 5.6% growth for GDP, a figure higher than that of the third quarter. It is hard to believe in this more favorable performance estimated by ECLAC, since the Cuban economy in the last quarter of 2021 suffered the paralyzing impact of inflation and the loss of income from tourism due to low arrival figures.

The distance of almost six percentage points between the two estimates requires the regime’s economic leaders to stop hiding and face up to their responsibilities. It is not the same that in 2021 the Cuban economy has increased its GDP, as ECLAC says, an ally of the regime in this type of issue, than that the Cuban economy has seen its GDP decrease again in that year, since it would be accumulating nothing more and nothing less than a three-year recession. Too long a period for an economy to fall continuously. As long as there is no official reaction, doubts will increase and confidence and credibility in the economy will continue to plummet, as will GDP.

It is not strange that this official silence is transferred to an erratic price of the Cuban peso in informal markets, causing situations of waste of unsold products, such as tomatoes a few days ago, a growing social unrest that no longer stops in social networks. , or provoke a sense of terminal crisis and growing uncertainty, which reaches even the leaders of the regime.

You have to report what happened to avoid the feeling of darkness and uncertainty that exists. The Cuban economy requires responsible management, similar to that developed in other countries of the world, and does not allow spaces for improvisation, nor to buy time waiting for things to improve. Because they won’t get better. That is sure.

The opinions expressed in this article are the sole responsibility of the issuer and do not necessarily represent the opinion of CubaNet.

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