Cuban economy continues to show signs of gradual recovery ›Cuba› Granma

The electricity situation in the country is very difficult, and due to the constant downtime of thermoelectric power plants, it was necessary to increase diesel production Picture: Dunia Alvarez Palacios

At the end of 2021, GDP growth in constant prices was 1.3%. This is not the 2% we expected, but after two consecutive years of economic contraction, we have started the recovery process, said Deputy Prime Minister and Minister of Economy and Planning Alejandro Gil Fernández to MPs from the National Assembly of People’s Power.

He also reported that the economy grew by 10.9% in the first quarter of 2022 compared to the same period in 2021, another sign of a gradual recovery in what remains a difficult scenario: blockade, pandemic, inflation and international crisis.

“However, based on this progress, we can confirm that the conditions are in place to achieve the plan target of around 4% for this year,” he said.

He recalled that the economy ended 2017 with a growth of 1.8%, while in 2018 it was 2.2%, which is “the highest result that the country has ever achieved”. Currently, the deficit is above 10% to match 2018 figures, but progress in 2021 is encouraging.

He added that the highest increases at the end of June were in education, hotels and restaurants, construction, transport and communication.

First half of the year, commodity exports totaled $ 1.262 billion and focused primarily on nickel, raw sugar (though well below production forecast), honey, tobacco, rum, biopharmaceuticals and telecommunications.

As for tourism – a key activity for the recovery of the national economy – he said that 682,297 tourists flocked to the country, 3,850,000 domestic tourists flocked daily, and the target of 2.5 million visitors per year was maintained.

On the other hand, he emphasized the need to increase foreign currency income, because although the current rates are higher than those we will get in 2021, they are still insufficient, which is reflected, inter alia, in bottlenecks, a supply shortage of the retail network and financing of the production structure.

“We lost $ 3 billion in revenue in 18 months and started recovering this year, but we need to step up the pace and look at all possible ways to manage these resources,” he said.

He also noted that some agricultural commodities still lag far behind demand, with high prices, speculation and resale, but there has been a slight recovery in some areas, such as food, vegetables and milk, although the impact on residents is yet to be seen. country or at prices we’d like to see.

The deputy prime minister also stated that the situation with electricity in the country is very difficult and that due to continuous downtime in thermal power plants, the production of electricity from diesel oil must be increased “at almost unattainable prices today”. “Fuel is slowing down the economy and slowing the recovery as various activities stop because of this deficit,” he said.

With regard to retail trade, it indicated that it grew by 13.8% compared to the same period last year and that 75.7% of sales (including services) were attributable to the CUP and 24.3% to the MLC.

Accordingly, he said there were bottlenecks both in the Cuban peso sales network and in some products sold in MLC stores, with restocking issues, currency deficits, rising freight costs, shipping delays and other logistical issues.

In his speech, Alejandro Gil referred to the fact that 437 state-owned companies suffer losses (23% of the total), that the average wage in the country is 4,150 pesos, and labor productivity is 71,944 pesos. However, he warned that we have productivity gaps and too many workers who do not match the level of economic activity.

Referring to other business entities, he emphasized that on June 30 there were 3,991 private and 51 state MSMEs and 55 non-agricultural cooperatives (CNA), which created over 70,514 new jobs.

The Minister of Economy and Planning also commented on price distortions and the need for price coordination at the provincial level, as well as analyzing why products sell at a cost that is six times higher.

There are many technical explanations for the inflation problem: supply deficit, cost inflation, currency devaluation, loss of purchasing power of income, and many technical solutions to this scenario: greater supply, market stability, higher production, etc.

But we have to keep our feet on the ground, and our economic model is different from the global one and we cannot apply everything that is in the books of the market economy, he warned. However, we have the duty and the right to prevent unfairly inflated prices, even if they are based on shortages, and to seek ways to control them at provincial level and with greater public participation.

It also confirmed that September 20 is the deadline for the transition for self-employed workers with more than three employees to a single legal form, whether they are MSMEs or CNAs.

A REFLECTION OF THE ECONOMY IN THE SOCIAL AREA

In connection with the economic recovery and social activity, he emphasized the return to school of 1,726,520 students and the number of students rose to 221,000.

In terms of sports and cultural activities, the deputy prime minister referred to the implementation of planned events: festivals, concerts, craft fairs and actions in communes.

In the field of public health, hospitals have established outpatient consultation hours for various specialties and intensified surgical and dental activities.

However, the pharmaceutical situation is complex with 236 shortages at the end of June (70 imported and 166 domestically) and 244 shortages are expected in July.

In turn, social assistance protects 1,660,236 people, and the average pension has increased from 1,607 pesos to 1,680 pesos, which, as we know, is still insufficient – admitted the minister.

For example, 3,805 mothers of children with severe disabilities receive support, 13,529 are in home care, 2,579 receive benefits for nursing homes, and 1,815 for grandparents’ homes.

He added that the funds donated to 42,737 families amount to 302,500,000 pesos and that transformation measures are being developed in 1,077 communities.

“We know that priority should be given to these people and communities, not focusing on helping but helping them realize themselves from this temporary vulnerable situation.

WORK ON PRICES AND MORE EFFECTIVE MEASURES TO FIGHT INFLATION

On this point, Minister of Economy and Planning, Alejandro Gil Fernández, explained that the measures taken so far to reduce inflation in the country were limited in scope and that more effective measures were needed, adapted to our context.

He informed that by December 2021 inflation was 77.3%, 17 percentage points higher than then expected, which has a direct impact on the purchasing power of wages.

“What happened this year?” Until the end of June, the cumulative inflation was 13.4%, which is less than in the first half of 2021, when 56.17% of cumulative inflation was recorded.

This does not mean, however, that we are better today, as this indicator is influenced by changes in relative prices in the economy and the increase in wages made during the reorganization.

He also pointed out that the inflation figures are skewed because we take official prices, but we know there are products that the population does not buy at these prices because there is, for example, Colero, who acts as an intermediary and resells chicken, which costs 24 in the store. pesos per pound, at a higher price. In this regard, he added that chicken price inflation is officially zero, but there are people who buy chicken through a reseller and it is then more difficult to measure inflation.

On the other hand, he assured that prices for electricity, gas, water and a basket of regulated basic goods remained despite rising prices in the international market and reaffirmed the need to work on disorderly prices in the country.

Measures to fight inflation need to be objective, consistent and tailored to our abilities, he said, noting that inflation increased by 28.8% compared to the same period in 2021.

He cited the effects of shortages, a lack of currency exchange, efficiency problems and inflation caused by international costs as reasons for this.

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