Inflation in Cuba is even worse than previously thought and, above all, than what the Government had announced. This is indicated in the report of December The Economist Intelligence Unit (EIU), which evaluates the increase in prices at almost 740%, compared to 424% previously forecast.
The data from that British analytical institution, disclosed by the economist Pedro Monreal In their networks, they also indicate that, far from the 2% growth announced by President Miguel Díaz-Canel for 2021, Cuba will only grow 0.1%.
The EIU estimates that the price increase will continue in 2022 at 88.8% and, in addition, considers “very high” the probability that the authorities “will fail to manage the dislocation derived from the unification of the dual exchange rate.” .
Monreal asserted this Monday that when the government implemented the so-called Ordinance Task, at the beginning of the year, it had enough data that showed that the consequence would be runaway inflation. Specifically, that between 2016 and 2020 the gap between demand and supply grew exponentially and that, therefore, printing banknotes to be able to increase salaries and pensions – part of the Regulation – without putting more goods in circulation would result in a growth of brutal prices.
“Assuming that a 432% increase in the gap in 4 years was an adequate basis to strike the demand for ‘ordinance’ expresses reckless voluntarism”
“A year ago the data on the gap between supply and demand were not public, but the statistics were known to decision makers”, writes Monreal based on figures from the National Office of Statistics and Information (ONEI). “Assuming that a 432% increase in the gap in 4 years was an adequate basis to strike the demand for ‘regulation’ expresses reckless voluntarism.”
The economic authorities they had priced the price increase at 70% and, overshadowing this data, they said that the informal market soared to 6,900%.
According to official numbers, Cuba’s gross domestic product (GDP) collapsed by 13% between March 2020, when the covid-19 pandemic began, and September 2021.
The Cuban economist living in Spain Elías Amor Bravo he asserted this december that to fight inflation the Government would have to implement three measures that for the moment “eludes”: monetary control, “revitalizing the role of the Central Bank and its autonomy in the exercise of monetary policy”; fiscal control, “establishing a path of adjustment to spending to prevent the deficit from continuing to be a money expansion pump” and, especially, to stimulate productivity, which would make supply grow “and relieve pressure on price increases “.
The specialist himself recalled the problem that this implies: that first of all “structural measures” would have to be adopted. And there are no signs that that will happen anytime soon. Miguel Díaz-Canel, also this month, once again blamed the “criminal blockade” of the United States for the island’s economic situation and, without referring to the lack of productivity, attributed the “supply deficit” to the “decrease in the earnings in foreign currency “already” the priority given to the financing of the expenses to face the pandemic.
“It will not be possible in the short term to solve all the problems,” he made clear at the closing of the Third Plenary Session of the Central Committee of the Communist Party of Cuba.
________________________
Collaborate with our work:
The team of 14ymedio He is committed to doing serious journalism that reflects the reality of deep Cuba. Thank you for joining us on this long road. We invite you to continue supporting us, but this time becoming a member of our journal. Together we can continue transforming journalism in Cuba.
