In Cuba, Prices Rose by 39 Percent in the Official Economy in 2022 and by 140 Percent in the Informal Economy

Items for sale in a state store in Havana. (14ymedio)

14ymedio bigger14ymedio, Havana, 2 February 2023 — Prices in Cuba officially rose by 39% in 2022, a figure that reflects the great deterioration of the population’s economy and mainly affects food, with an increase of 62.9%, as published on Wednesday by the National Office of Information and Statistics (Onei).

The data are much better than those of the previous year, when December closed with a 77.3% increase in the consumer price index (CPI,) dragged down by Transport, which grew by 188%, and Housing, by 153%. That year, food prices increased by 114%. This does not hide the fact that Cubans have spent twice as much as a year ago on eating, accumulating increases. In addition, the authorities themselves are aware that the official calculation is far from reality, since  most citizens have to resort to the informal market to find food.

This month’s price increase is more moderate than in the past, although not insignificant. Prices rose by 3.7% in December, somewhat less than in November, when they increased by 4.1%.

Highlights include the increases in very essential products in the daily life of the average Cuban, such as red beans (13%), toilet paper (10.5%) and black beans (10%). Sweets and flour increased by more than 8%. However, in some state markets, tomatoes (-19.8%) and pepper (-5.7%) have gone down.

By sector, Food and Non-alcoholic Beverages are once again taking center stage, rising by 5.6% this December. Here you can also see, once again, the cost of animal protein. Pork (8%), lamb and ham (more than 6%) have gone up, and eggs and rice ((5.4%). The basic accompaniment of dishes in family meals continues to go uo, and in December the  price increased by 3.7%.

Restaurants and Hotels is again the sector that closely follows food in its escalation. This December, prices increased by 4.22% and throughout the year it accumulated 55.6%. The rise is in the price of snacks (7.8%), followed by breakfast (4.6%), takeaways (3.5%) and soft drinks (2.5%).

The third sector that most affects price variation is that of Goods and Services, although its rise is discreet (2.6%). Education is ahead of it, with prices that increased in December by 3.9%. Furniture and Household items increased by 2.7%. However, the top three win, because of how much they impact daily life: the increase in the cost of toilet paper, dye (6.1%), shampoo and perfume (both around 3.8%).

The only sector whose prices fell was that of Alcoholic Beverages and Tobacco (-0.12%), undoubtedly dragged down by the drop in cigars (-0.8%). However, throughout the year the price variation is more than 25%, remaining globally the third group of products by price increase in all of 2022.

Other lower-impact increases are in Transport (0.3%, although 13.5% per year), Housing (1.2%, but 13.2% in 2022), Recreation and Culture (0.34%) and Clothing and Footwear (0.41%). Much more insignificant is the rise in Health and Communications prices, which, without falling, barely rise by 0.09% and 0.06% respectively.

“The data subscribe to the difficulty of the economic scenario, in which price increases are combined with lower economic growth, which points to a complex situation of stagnation (acceleration of inflation and stagnation of production), whose solution can be much more complex,” the Cuban expert based in Spain,  Elías Amor, points out in his blog,  Cubaeconomía, and he adds that the authorities of the Island do not seem to be doing much to control the situation.

The American economist Steve Hanke, who makes calculations taking into account the informal economy, put 2022 inflation in Cuba at 140%, more than three times higher than that provided by the Government with official prices; although since the beginning of the year it has reported increases in the environment of 60%, very high again, but considerably lower. In addition, the expert also accounted for the devaluation of the peso, which since January 2022 has fallen by 57.65% against the dollar.

Translated by Regina Anavy 


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