The Cuban State spent almost 39% more than it did in 2023, according to official figures
EFE/14ymedio, Havana, 15 August 2024 — Inflation remains unstoppable in Cuba and grew at an annual rate of 30.48% in July, according to data provided this Thursday by the National Office of Statistics and Information (Onei). The variation of the consumer price index (CPI) with respect to June was 0.83%, and the accumulated so far this year stands at 18.78%.
The official figure is not far from the one reported, independently by the American economist Steve Hanke, who places it at 32% per year and describes it as “crushing.”
The increase in tariffs on imported alcohol and tobacco, which entered into force in January, continues to leave its mark on the CPI that, for July, reports the largest year-on-year increase in alcoholic beverages and tobacco at 50.48%. It is followed by restaurants and hotels (36.71%), food and non-alcoholic beverages (35.17%) and transportation (32.58%).
The variation of the Consumer Price Index with respect to June was 0.83%, and the accumulated so far this year stands at 18.78%
As usual in monthly inflation reports, practically all items experienced year-on-year increases above 10%. During July, there were only three exceptions: recreation and culture (9.32%), communications (0.75%) and health (0.72%). The last two cases are state monopolies.
For the third consecutive month, the report emphasizes that the figures include the private sector, a clear boom since the legalization of MSMEs in 2021. Onei stated that 80.41% of the 8,176 establishments in the sample belong to the private sector, while the bulk of retail trade in the country is still in the hands of state companies.
In this context, the Cuban State spent 38.8% more than it earned in 2023, thus recording the highest fiscal deficit since 2020, according to official data published this Thursday by the Ministry of Finance and Prices. According to the figures collected in the Statistical Yearbook, the negative fiscal balance of the Cuban State amounted to 94,959 million pesos (3,798 million dollars, at the official exchange 24 CUP for one dollar).
Cuba spent 38.8% more than it earned in 2023
The income came mainly from the tax on utilities and other non-taxable revenues, while the main expenses were in the portfolios of Health, Social Assistance, Public Administration (which includes Defense) and Education.
Cuba accumulates five years of large fiscal deficits, and since the end of 2023, it has presented two adjustment plans to increase income – mainly in hard currency – and to cut expenses.
Total net income amounted to 245,076 million pesos, slightly more than in 2022, but less than in 2021. Total expenses rose to 340,492 million pesos, 8% and 6% more than in 2022 and 2021, respectively.
The country is immersed in a serious economic crisis that has worsened even more since four years ago, with the evident shortage of basics – including food, medicines and fuel; galloping inflation; the partial dollarization of the economy; and frequent power outages.
Translated by Regina Anavy
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