The Cuban government this Saturday revised the island’s economic growth in 2018, which now stands at 2.2% instead of the 1.2% announced last December, due to unplanned increases in the construction, health and agricultural sectors.
“In 2018, once the calculations and reconciliations of the levels of activity that determine the economy’s performance were concluded, a GDP growth of 2.2% was reached, higher than 1.2%, which, as estimated, we reported in December,” explained Cuban President Miguel Díaz-Canel.
The president reported on the change in the GDP growth during the closing speech of the third session of the island’s 9th legislature of Parliament, in which the former president and leader of the Communist Party of Cuba, Raul Castro, was also present.
The previous figure had been drawn up “based on the real results of the July economy, the end of September and an estimate of December,” Economy Minister Alejandro Gil told deputies.
The change was influenced by “above the estimate” growths in the construction area, which experienced a 9.3% rise compared to the calculated 2.2% decrease, he said.
There were also growth indices for health (from 1.3 to 3%) and agriculture (from a 4.9% drop to a 2.6% growth), the official website Cubadebate reported in the review of the parliamentary session, to which the foreign press doesn’t have access.
The previous 1.2% was announced last December by Gil himself in the National Assembly’s last plenary session of the year, which registered a 1.6% economic growth in 2017 according to government data, whose indicators are not audited by any international organization.
At the time the Cuban minister of economy acknowledged that the forecast of 2% for 2018 would not be met, although he considered the result was “commendable” amid an “adverse scenario” due to the U.S. embargo and breaches in key sectors such as tourism and services.
Corruption and illegalities, the low level of savings, indebtedness and insufficient income from exports are among the main burdens of the island’s economy, which is trying to ward off the specter of recession, which reappeared in 2016 (-0.9 %) for the first time in more than 20 years.
Cuba managed to recover with the 1.6% achieved in 2017 and now with 2.2% in 2018, while for this year the government expects a “realistic” 1.5%, a goal that is at risk due to the strengthening of the U.S. economic embargo and the new ban on cruise ships docking in Cuban ports.
This week Minister of Tourism Manuel Marrero informed Parliament that compared to 2018 the loss of 10% of foreign tourists is being predicted, and acknowledged that the suspension of cruises from the U.S. will prevent reaching the goal of 5.1 million visitors, a figure that now stands at around 4.3 million.
The crisis in Venezuela, which has drastically reduced its shipments of subsidized crude, the termination of thousands of contracts for medical services in Brazil and the damage caused by natural disasters could also negatively influence Cuba’s economic growth this year.
Performance during first semester of 2019
During the ordinary session of Parliament, Minister of Economy and Planning Alejandro Gil Fernández reported that during the first semester of this year, exports are being met by 103%. The items that are growing are medical services, cigars, rum, lobster, concentrated juices, fresh fruits, coal, and tourism, nickel and air transportation are decreasing.
On the other hand, imports have increased by 10.4%.
The sugar harvest produced 1.827 million tons of sugar, 191,000 tons less than planned. Income, however, was compensated because the price for the pound of sugar was higher than forecast.
Oil production increased slightly (39,000 tons more) while the generation of energy from renewable sources is not meeting what was planned due to problems with the harvest and “in investments in the sector.”
In relation to food products, the minister reported that 77,000 tons of rice were produced and 450,000 tons were imported. The plan for the semester is not being met in the production of beans, wheat flour, corn, soybean meal, pork, beef. Egg production stands at around 5 million daily, still far from the 5.7 needed to maintain a non-rationed supply.
Among the main investments made, the minister mentioned the multipurpose terminal in the port of Santiago de Cuba, six new photovoltaic solar parks (14.4MWp), 2,340 motor vehicles, 2,920 rooms for tourism, new railroad cars.
Regarding foreign investment, he mentioned the approval of 12 new projects for an investment of 1,485,764 dollars, plus the extension of five established businesses, for 55.626 million dollars.
A total of 15,748 homes have been completed, 6,321 by the state sector and 9,427 by individuals’ own effort.
In the eye of the storm
During his speech this Saturday, Miguel Díaz-Canel warned that the revised economic growth index for 2018 “implies that in order to achieve the planned growth in 2019, it is necessary to grow more than initially planned.”
“This year, even in the eye of the storm of the adversities that the enemy conceived to suffocate us, the Cuban economy can slightly grow thanks to the fact that we have the potential to resist and continue advancing in our development,” he insisted.
He added that in the first half of 2019 “the expected revenues from exports were not reached. However, production levels essential for the country have been met.”
Díaz-Canel mentioned the “supply shortages” of previous months, when basic products and foodstuffs disappeared from the stores, and recognized the “deficit” in the import of fuel, which has made it necessary to apply “internal restraint measures” to avoid scheduled blackouts.
The president affirmed that the government is putting all its resources in the “economic battle,” and advanced the future application of new measures that will be “opportunely informed.”
In this Saturday’s plenary the Cuban Parliament approved the country’s new Electoral Law, in addition to two legislations: on National Symbols and Fishing. The latter is the first approved in the Caribbean island on this activity.
The Cuban president advanced that the implementation of the Electoral Law, the first legal provision of the recently proclaimed Constitution, will allow electing in October the high-ranking posts of the State and designating a new Council of Ministers “before the end of the year.”
EFE / OnCuba