The Cuban economy was impacted last year by food prices, 20% higher than between 2014-2016, as well as the impact of the price of a barrel of oil, which, although it was reduced in relation to 2022, averaged more than 77 dollars last year. Photo: José Manuel Correa.

Due to the complex situation faced, last year the Cuban economy suffered a significant setback,

with its Gross Domestic Product (GDP) decreasing between 1 and 2%,

according to official estimates, an evolution that revealed the presence of external factors. negative effects and also the effects of difficulties in the management of the national economy, which had already been affecting since previous years, with growth lower than the planned figures.

To begin with, if we want to be fair, a fundamental factor that cannot be ignored in this sense is the growing impact of the United States economic blockade, whose negative consequences over more than 60 years, and until February 2023,

were of more than 159,084 million dollars, with 4,867 million in just one year

, which has made it the fundamental obstacle to our development, although it is not the only element that affects the evolution of our economy.

Added to the above are the consequences of the international economic crisis, which kept

food prices 20% higher than between 2014 and 2016

, as well as the impact of the price of a barrel of oil, which, although it was reduced in relation to 2022, averaged more than 77 dollars last year, all of this in the midst of the war in Ukraine, which acted as a catalyst for these negative trends, to which are added the consequences of the bloody war that Israel is waging against the Palestinian people, which It has already had a strong economic impact, raising the costs of international maritime transportation.

The impact of these factors has led to decreasing rates of growth in the world economy, which continues to be influenced by the possibility of the outbreak of a major economic crisis, which generates great uncertainty about any projection of what may occur in the national economy, in countries that – like Cuba – present a high level of external openness.

In addition, of the economic elements mentioned, the consequences of COVID-19 have continued to impact the world economy, and also in Cuba, which has affected

around 10% of our population

, with a fatality rate of 0.77. %, although its deadly effects have not been greater thanks to the vaccines developed by our scientists.

Vulnerabilities of the Cuban external sector

Returning to the evolution of our external sector, the value of exports of goods and services in 2023 was 9,065 million dollars,

a value lower by around 770 million than planned

, a figure that includes about 2,155 million in goods and 6 910 million in services, for a level of exports also lower than what was achieved in 2022.

Added to the above is a higher than expected expenditure on imports of goods, due to the increase in prices, which represents

an expenditure of 718 million additional dollars in relation to 2019.

In terms of our exports, there was a 15% drop in the price of a ton of nickel, whose production

remained at 41,000 tons in the year,

while the price of sugar increased by 28%, although national production remained 25% below plan.

Another external flow that was affected last year was the volume of remittances received by the population, which is estimated to

have fallen below 1 billion dollars

, after having reached more than 2 billion at the end of the last decade.

In this regard, it should be noted that remittances play an important role as capital of the non-state sector of the economy, but they also impact the consumption fund of the population that receives them, and that uses them for purchases in the market in convertible currency that exists on the Island.

In relation to foreign direct investment (FDI), a slight advance was obtained in the number of new businesses contracted, but the need for greater flexibility in the treatment of foreign investors who decide to invest in Cuba remains, taking into account that they face greater risks based on the blockade that the United States imposes on our country.

On the other hand, it is essential to achieve greater and better results in the creation of businesses that ensure a rapid increase in food production, and superior energy security.

In addition, Cuba continued to face the consequences of non-payment of the foreign debt, which has been occurring since 2019.

In this regard, new deadlines have been achieved to make payments, which go until 2027, but the amount to be paid is taxed by the late payment interest surcharge.

The need for a redesign in the treatment of external debt is thus evident, so that new avenues for debt service can be materialized, with the aim of ensuring superior external financing, which will be further explored when examining the perspectives. of 2024.

Despite the adverse conditions faced by the external sector and the overall negative results, the evolution of the national economy registered some positive results, thanks to the efforts of our workers, which is expressed in a gradual recovery of international tourism, which

grew 51%, totaling 2.4 million visitors and 400 million dollars more in gross revenue.

Also the better management of the electricity industry, which allowed blackouts to be reduced by 70% last year; Oil production in the country remained at 3.1 million metric tons, which ensures – to a certain extent – ​​the generation of our thermoelectric plants; and 42 new foreign investment agreements were signed, up to a total of 343 active businesses in 2023.

Meanwhile, socially,

it was possible to reduce the infant mortality rate

, since if in 2022 that indicator was 7.6 deaths per thousand live births, last year's figure closed at 7.1, while the maternal mortality rate was set at 38.7 per 100,000, for a decrease of 5.4%.

Likewise, a prioritized level of care was assured – in accordance with the possibilities – for people and communities in vulnerable situations.

The adverse conditions present last year – together with the application of internal measures, which did not give the expected results – have caused the country to suffer, between 2019 and 2023,

a loss of more than 3 billion dollars in external income,

as reported in the session of the National Assembly of People's Power, December 2023.

This situation has led to the need to adopt, without delay, urgent measures that, as the First Secretary of the Party and President of the Republic, Miguel Díaz-Canel Bermúdez, has pointed out, should lead us to greater efficiency in our economy.

At this point in the analysis it is useful to have a broader idea of ​​the evolution of the production of goods and services in 2023, as well as the economic policy applied, before moving on to examine the prospects for the current year.

(Taken from Granma)