14ymedio/EFE, Havana, 20 May 2023 — Annual inflation in Cuba’s formal market stood at 45.36% in April, compared to 23.69% in the same month of 2022, fueled by food and catering, the National Statistics and Information Office (Onei) reported Friday.
This agency does not include the changes in prices in the island’s informal market, which is the largest and best-stocked, and is more prone to inflation due to the severe shortage of basic products on the island and the total lack of regulation.
Meanwhile, the consumer price index (CPI) increased by 2.78% in April compared to the previous month, Onei said.
By category, the annual increase in Food and non-alcoholic beverages (70.67%), followed by Restaurants and hotels (64.91%), Miscellaneous goods and services (21.79%), Furniture and household items (21.19%), Education (19.50%) and Transportation (19.15%) stood out.
In April alone, prices for Restaurants and hotels experienced a 4.01% increase, followed by 3.70% for Food and non-alcoholic beverages.
All categories experienced annual price increases, many of them with double-digit rates. The least inflationary were Health (2.41%), Communications (0.34%) and Alcoholic Beverages and Tobacco (1.82%), sectors controlled by state monopolies.
This sharp price increase follows upon the one recorded in 2021, when Onei put inflation at 77.33%, and 39.07% for the Cuban formal market in 2022.
There are no data on the trends in the Cuban informal market, where some commodity prices have doubled in the last 12 months and an exchange rate of 120 pesos to one dollar is in effect. A carton of 30 eggs has gone from 600 to 2,000 pesos in Havana, when the average salary in 2022 was 4,200.
According to a report by The Economist Intelligence Unit (EIU), inflation in the informal market reached almost 740% in 2021, the first year of the entry into force of the Ordering Task legislation. The situation improved in 2022, as prices rose 140% in the informal market, according to US economist Steve Hanke.
Since Cuba imports 80% of what it consumes, according to UN estimates, the depreciation of the peso is relevant in the inflationary spiral. Cuba has been going through a serious economic crisis for two years, as evidenced by the shortage of basic products (such as food, medicines and fuel), the partial dollarization of the economy, prolonged and frequent blackouts, and a sharp increase in prices.
The effects of the pandemic and errors in national macroeconomic policy are the main causes of this crisis, which is fueling migration – mainly to the US – and social discontent.
Translated by Hombre de Paz
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