A shadow is cast over the annual economic situation

The New Year in Cuba foresees many uncertainties when it comes to predicting the economic future of the island.

While Cuba has never seen very prosperous years, 2019 presented a difficult economic outlook for the country, which faced not only the aggressiveness of the US government, but also contradictory domestic measures seeking to keep economic laws tied to political principles.

Predicting what the New Year holds for businesses is a risky exercise, as diverse factors must be considered, such as the progress in attracting foreign investment, which should reach an annual minimum of 2 billion dollars to guarantee considerable economic growth rates. Although there is an increase in businesses linked to the productive sphere in the main port destined to this objective, the Mariel Special Development Zone, only 26 of the current 49 approved businesses are operational.

“We are committed to the search for new businesses for Cuba, but it is important that these resources are directed towards strategic sectors of the nation (tourism, food and agriculture, oil and industry), to projects that promote productive chains, generate exports and/or substitute imports,” stated Minister of Foreign Trade and Investment Rodrigo Malmierca during the presentation of Cuba’s Portfolio of Foreign Investment Opportunities 2019-2020, in November. 

While the country is advancing at the national level, other policies that require government approval, such as on customs restrictions, permission for imports with a commercial character for all private sector actors, and the absence of well-stocked wholesale warehouses and markets, will continue to negatively impact non-state businesses in the midst of their takeoff.

Slight growth in sales in agricultural markets compared to 2018, the fall in chicken imports from the United States and Brazil, and the drop in foreign visitor numbers, occupation rates and income for the tourism sector in 2019, all issues addressed by economist Pedro Monreal on this Twitter account, represent highly influential aspects for both state and private development.

Lastly, the drastic change in the economy with the sole use of the Cuban peso and the gradual elimination of the CUC will bring headaches that entail the readjustment of the accounts of many establishments, a popular monetary re-education, and possible price increases.

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