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    GDP grows, but does not reach pre-pandemic levels

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    Crece el PIB, pero no alcanza niveles prepandemia

    In the first quarter of 2022, Cuba's GDP grew by 10.9% compared to the same period in 2021, when the country was practically paralyzed, reported the Minister of Economy and Planning, Alejandro Gil Fernández, before the National Assembly of People's Power, gathered at the Havana Convention Center.

    “It is a large rate, but it goes against a first quarter of 2021 in which we were practically paralyzed. In 2021 we had decreased by 12.7”, the minister clarified and ratified the goal of reaching 4% by the end of the current year.

    To explain this result, Gil Fernández presented the official figures at the end of 2021. The economy began a gradual recovery in its activity levels after two consecutive years of contraction. The GDP grew, at constant prices, by 1.3% compared to the previous year, which reported a gross domestic product much lower than in 2018.

    In 2017, the economy closed with a growth of 1.8%, while in 2018 it grew by 2.2%, the "highest result the country has had," said the minister.

    He recalled that “in the first quarter of 2019 we had been growing, but as of the second semester, with the tightening of the blockade, the economy ended with a decrease of 0.2%. Then came the big drop in 2020, of 10.9%, caused by the lockdown and the pandemic.”

    He calculated that the country has a gap of over 10% to reach the figures for 2018. However, the behavior in 2021 is a step in favor of a gradual recovery.

    The activities with the highest positive numbers are public health and social assistance, communications, hotels and restaurants (from the opening of borders) and construction activity.

    In contrast, productive and commercial activities decreased, including the manufacturing industry, commerce and the supply of electricity, gas and water.

    “In 2021 the recovery was slow, because we were under the effects of the pandemic. In 2022, we start a recovery. The goal is to recover activity levels with respect to 2019. If we compare, we are still around 7% below what we advanced in 2019”, the minister explained.

    He reiterated that the recovery is slow, because "we have a blockade, we are coming out of covid-19, with inflation in the world and in a complex global economic environment."

    In this first quarter of the year, the activities that grew the most were education, transportation and exports of goods, which increased by more than 300 million dollars, mainly in nickel, due to its high prices in the world market; sugar (although well below planned production), honey, tobacco, rum, biopharmaceuticals, and telecommunications services.

    Regarding tourism, Gil Fernández pointed out that at the end of the semester, more than 680,000 travelers had arrived in the country and that the goal of receiving 2.5 million visitors in 2022 is maintained.

    “It is a key factor in this year's recovery. We do not have a substitute source of that income,” he said.

    Foreign exchange earnings in the first half amount to more than $2.5 billion. “A sign of recovery. We are entering more than in 2021, when almost nothing was entered, since tourism was paralyzed, to which was added the impact of the blockade.

    Although this result even exceeds that of the first quarter of 2020, it is lower by 1.5 billion dollars than that of 2019.

    “We have a contraction in foreign exchange earnings even though we are recovering. Our goal is to reach 2019 levels as quickly as possible,” said the Minister of Economy and Planning.

    However – he warned – “it does not depend only on us. It also depends on the behavior in the world and the international context. Also, of actions that we have to undertake”.

    He reported that the importation of food and fuel reports an overspend of at least 50%.

    “We have a deficit of resources to maintain the stability of the economy. Lost $3 billion in revenue in 18 months. We have to speed up the pace to recover," he said.

    A slight recovery is observed in agricultural production, although "well below demand” and a complex situation with energy and fuel persists, "which is slowing down the recovery of the economy".

    “We have more diesel consumption for generation than anticipated in the plan, due to the deficit we have in thermal generation.

    “Diesel is practically priceless at current prices. In addition, its level of replenishment does not give us the capacity to distribute fuel on time, even if we sometimes have it in the country,” he explained.

    Regarding the situation of the electric power system, the minister reiterated the existence of breakdown and financing problems and said that some measures have been taken that cause the economy to slow down, which also affects the population.

    Retail merchandise circulation complies with its plan at 99.2% (75.7% in sales in Cuban pesos and 24.3% in MLC), although well below demand.

    “The plan had to be the demand if we had the resources to respond. But when we compare it to 2021, we grew," Gil Fernández said.

    “There is a shortage in everything, in the sales network in pesos and also in a certain level of sales in MLC, which also has to do with international logistics and freight prices,” he specified.

    The total net sales of the business system meet its planning at 108%, "which does not mean that there is growth associated with efficiency," he warned and said that there are 437 companies with losses that receive a subsidy from the State budget.

    The average salary in the country is 4,150 pesos.

    Productivity is more than 71,000 pesos, 3% higher.

    386 state entities apply salary flexibility and their own system, which covers almost 500,000 workers.

    More than 4,000 new economic actors approved, of which almost 4,000 are private MSMEs and 51 state-owned. Around 70,000 new jobs have been created.

    “There are distortions that we have to correct and quickly. We have not achieved an effective insertion of the economic actors with the state company, where there are also distortions,” he acknowledged.

    He said there are also price distortions. “We have not established massive prices for the state sector. You have to see the reasons why products are being sold three and four times above their cost. We have every right not to allow abusive prices.”

    The minister asked to find a way to control this in the territories, with greater popular control and solidarity.

    Gil Fernández said that deviations are being observed in the design of the model "that we have to correct in a timely manner."

    He recalled that on September 20 the transfer to mipyme or cooperative of businesses managed by self-employed with more than three employees will conclude.

    Regarding public health, surgical activities are increasing, but medicines present a complex situation.

    In the case of social security:

    More than a million people are protected, although the average pension is insufficient.

    The payment of the nursing home is assumed by the State.

    Resources have been delivered to more than 42,000 families in vulnerable situations to help people get out of that situation.