Economy growing modestly but tourism under pressure

President Díaz-Canel has said that while production levels essential to Cuba’s development are being met, the Cuban economy only grew modestly in the first months of the year, and tourism and foreign investment remain under pressure as a result of US sanctions.

Speaking on 13 July at the close of a meeting of Cuba’s National Assembly, Díaz-Canel said that despite the impact on US visitors arrivals of the Trump Administration’s policy, the fiscal deficit was lower than planned, suggesting that “the country is advancing”. He noted however that it was evident that there were peaks in shortages in various products caused not just by the lack of liquidity but by what he described as a “persistence of an import mentality” among Cubans. 

Referring back to 2018, Díaz-Canel said that GDP growth had been revised upwards from 1.2% to 2.2% and that achieving growth at the level of 1.5% planned for 2019 will be difficult. Tourism in particular, he said, had been affected by the cancellation of arrivals on cruise ships. He also noted that expected revenues from exports such as nickel had not been achieved. However, debt repayments, were he said, ‘in excess of the debt’.

Cuba’s President also indicated that in the light of the country’s fuel deficit, measures to ensure increased control over fuel were being taken with the objective of supporting the generation of electric power.

Speaking about other issues he said that: unemployment was estimated at 1.6%, a level similar to 2018; projects with foreign investment were underway to increase chicken production; pork production would improve as the year went on; the country’s municipalities must continue to find ways to cut costs and increase efficiency; and lessons from the Special Period following the collapse of the Soviet Union must be learned so as to avoid the possibility of another occurring.

He also observed that it was important that Cubans abandon the idea that all solutions will come from above, while noting that in the light of the growing incidence of fake news spread on social media Government was committed to offering “timely information on measures and decisions” and “to tell the truth”.

Cuba’s President also criticised officials who he said placed their position above problem solving, called for “sensibility” to citizens’ concerns, and criticised those who hinder or delay a procedure. He also called on all who serve to recover habits of courtesy, to act in the interests of the collective and with decency. Only in this way, he said, “will the economy grow, and spiritual strength grow”.

On foreign policy, he said that Cuba in common with others in the international community had to face what he described as the arrogant attitude of the US President and reaffirmed Cuba’s continuing support for Venezuela.

Earlier in the week a Permanent Commission of the National Assembly had heard that Cuba’s governments expect a 10% decrease in the arrival of foreign tourists this year following the US Administration’s ending of group educational trips by US citizens, a measure that halted cruises ship arrivals.

According to Manual Marrero, the Minister of Tourism, it is now likely that 2019 will end with the country receiving 4.3m international visitors, or 84.3% of the 5.1m originally anticipated this year, and a decrease of 10% of the 4.7m received in 2018. The minister said that for the second half of this year a reduction of some 560,000 cruise visitors is anticipated. “At the moment we do not have any (cruise) ships operating into Cuba,” he said, noting that originally the island had been planning to receive 1m cruise passengers this year.

Cuba Briefing will next week include a more detailed summary of the Minister’s remarks and thinking on future tourism growth.