Cuba experiences slow economic recovery to 4% in 2022 – official

A vendor shows Cuban peso banknotes at a public market in Havana, Cuba on June 12, 2021. REUTERS / Alexandre Meneghini

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HAVANA, Dec.12 (Reuters) – A cash-strapped and crippled Cuban economy will grow 4% next year as the communist-ruled country struggles to recover from an economic crisis, according to a report by the Communist Party. Prime Minister released this weekend.

Prime Minister Manuel Marrero Annual Report said the economy had started a slow recovery of around 2% this year after declining 10.9% in 2020 and stagnating for several years previously.

New US sanctions in addition to the decades-old trade embargo and the coronavirus pandemic have cost the import-dependent country at least $ 4 billion in revenue over the past two years, according to the government.

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The deficit resulted in a 40% drop in imports and hampered the government’s ability to provide Cubans with food, medicine, consumer goods, and inputs for industry and agriculture. Cuba has defaulted on certain payments to its creditors and suppliers.

The government’s decision to devalue the peso for the first time since Cuban leader Fidel Castro’s revolution in 1959, combined with increased dollarization of the economy, triggered triple-digit inflation estimated by local economists at around 500% this year.

The 4% growth target could indicate that Cuba will still experience shortages of essential goods and still have difficulty paying its creditors, said a Western businessman in Cuba with years of experience in the market. .

The government is preparing measures to control inflation and strengthen the peso, Marrero said. The peso trades around 70 to the dollar in the informal market against the official rate of 24 pesos.

“A package of measures must be adopted in order to stop the inflationary spiral,” Marrero said in his report, without specifying what they might be.

Marrero credited a vaccination campaign that reached 80% of the country’s population for paving the way for a nascent recovery next year.

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Reporting by Marc Frank; Editing by Dave Sherwood and Lisa Shumaker

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