Official data confirm an 11% fall in GDP over the last five years.
14ymedio, Havana, 14 July 2025 — The Cuban economy is not in recovery. Economy Minister Joaquín Alonso Vázquez made this clear on Monday during the session of the Economic Commission of the Parliament, in the presence of the president himself, Miguel Díaz, and the president of the National Assembly, Esteban Lazo. In his report, Alonso Vázquez revealed that Gross Domestic Product (GDP) has fallen by 11% over the last five years, although it is likely to have been even more, apart from the official statistics. The session was marked by a gloomy tone, lack of solutions and an implicit recognition of a country in the midst of economic collapse.
The most crushing figure was the contraction of 1.1% of GDP in 2024, against the modest 2% growth that had been planned. But the most alarming thing is that, since 2019, the national economy has lost more than one-tenth of its size. According to the minister, primary production – including agriculture, livestock and mining – has been hit hardest, with a 53% drop. Manufacturing (23%) and social and non-social services (6%) also declined.
This decline is compounded by a complicated external context, marked by lack of access to fuels, rising international prices and the paralysis of key imports due to currency shortages. However, the biggest obstacles remain internal: structural distortions, an unstoppable growth in external debt, business inefficiency and a dilapidated energy system.
Cuban exports in the first half of 2025 barely reached 62% of what was planned
Minister Alonso’s report revealed that Cuban exports in the first half of 2025 barely reached 62% of what was planned, well below the disastrous 78% of the same period last year. The country is unable to place products such as nickel, honey, charcoal and shrimp on the international market, and biopharmaceuticals are also experiencing setbacks. Although there was some recovery in items such as tobacco, lobster and fishery products, it was not enough to reverse the negative balance.
As for tourism, another of the country’s strategic sectors, the figures are particularly depressing. At the end of the first half of the year, Cuba received 1.6 million visitors, which represents only 71% of the planned number. Domestic tourism also suffered, falling by 5.2 per cent.
During his presentation, Minister Alonso explained that the country continues to import more than it exports, which increases the trade deficit. Imports covered only 67 per cent of the plan’s projected needs, but expenditure was 7 per cent higher than in the previous year, reflecting an increase in the cost of international goods and freight.
Massive external debt continues to be a growing and unsustainable burden
One of the heaviest burdens on the Cuban economy is its large external debt, the size of which, according to the minister, remains a growing and unsustainable burden. Although the Government has been successful in renegotiating installments and restructuring commitments, the lack of liquidity and systematic default on payments have eroded the country’s financial credibility.
The situation is so critical that, according to Díaz-Canel himself, that the current revenues of the State “are not enough to purchase basic raw materials to increase national production.” Nor are they sufficient, he said, to “inject currency into a functional exchange market” or to supply semi-finished goods to shops in national currency.” We try to solve problems by redistributing scarce resources, but that is no longer enough,” he acknowledged.
In his assessment of the business system, the Minister warned that while the number of loss-making enterprises has decreased, this is not due to efficiency improvements but to a general rise in prices. Private MSMEs*, which already number over 11,000 in the country, account for more than 50 per cent of the national economy, but they still face bureaucratic obstacles, import restrictions and an increasing tax burden.
The deputies called for exploring new ways to capture remittances
Speaking about remittances, one of the country’s financial engines in the last decade, the minister noted that there are increasing difficulties in channeling them due to US restrictions, but he did not give details about possible alternatives. The deputies called for exploring new ways to capture that cash flow, which in practice supports millions of Cubans.
Nor has there been progress in foreign investment. In the first half of 2025, only 14 new businesses with foreign capital were approved, focusing on areas such as hydrocarbon production, wholesale and retail marketing, light industry, and finance. None of these projects has begun to generate substantial revenues.
Alonso stressed the urgency of implementing measures to stabilize the economy. Among them he mentioned the reform of the exchange market, the containment of the fiscal deficit and the promotion of exports through self-financing schemes, 23 of which have already been implemented. However, none of these measures seems to have an immediate effect.
The National Assembly admits that the current model is no longer viable.
The Minister also acknowledged the increase in accounts receivable, the persistence of tax evasion and the lack of productive “chains” as elements that hinder any attempt at recovery. Meanwhile, prices remain high, wages are insufficient, and inflation, although lower than in 2023, continues to affect purchasing power.
The Cuban regime is failing to contain the economic collapse and now admits, with fewer and fewer euphemisms, that the current model does not work. But instead of undertaking a major reform, it insists on partial measures, attributes the causes to external factors and clings to an approach of control that has already failed. The pessimism that fills the air of the National Assembly does nothing more than reflect the widespread feeling on the streets: the Cuban economy is literally in free fall.
*Micro, Small and Medium Enterprises
Translated by Regina Anavy
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