MIAMI, United States. – Cuban economist Pedro Monreal launched a harsh criticism of the Cuban government’s economic policy on Monday. a series of posts on social network X.
Monreal pointed out that the official measures to contain inflationsuch as budget management, price caps and banking, are not working and the real government strategy is based on reducing real wages and pensions.
The economist said that “the official insistence that budget management, price caps or banking are key instruments to contain inflation is incorrect.” According to him, the evidence points to “the centrality of the compression of labor remuneration as a percentage of GDP” as the true tool used by the Government.
Monreal also argued that, given a weak supply response, the macroeconomic stabilization policy in Cuba has focused on containing aggregate demand. “The management of macroeconomic ‘stabilization’ in Cuba has consisted, to a large extent, in crushing the percentage that workers’ compensation represents in the GDP,” he wrote.
The economist also harshly criticized the impact of the so-called Task Sorting launched by the island’s regime. “Far from fulfilling its promise of improving the lives of citizens, the ‘restructuring’ package reduced real wages (adjusted to official inflation) by one third in just two years, but fell by 58% when adjusted using less optimistic inflation data,” he explained.
In addition, Monreal described the government’s anti-inflation strategy as one that is largely based on the reduction of real wages and pensions. “The official anti-inflationary recipe in Cuba revolves largely around the reduction of real wages and pensions and the resulting widespread impoverishment that partially restrains demand derived from very high fiscal deficits,” he said.
Finally, he criticised the government’s direct control over state salaries and pensions, which he described as “the bird in the hand” of the official anti-inflationary policy. “With direct control over state salaries and pensions, these function as ‘the bird in the hand’ of the official anti-inflationary policy, although this is not mentioned. The official discourse prioritises the marginal (price caps) and the hypothetical (reduction of the fiscal deficit),” he concluded.
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