Cuba is suffering from shortages, prolonged daily blackouts, high inflation, recession, dollarization, mass migration, and an accelerated deterioration of living conditions.
EFE (via 14ymedia), Havana, 25 October 2025 — The Cuban crisis is “systemic” and its planned economic model has likely reached “its limits,” said renowned Cuban economist Pedro Monreal in an interview with EFE. He emphasized that the first step in economic reform must always be “political.”
“The current situation is very critical, more critical than during the Special Period, between 1990 and 1993,” he said, referring to Cuba’s worst crisis to date, which followed the collapse of the Soviet bloc in Europe.
This doctor in Economics from the University of Havana, who has taught and researched for decades in his country and abroad, currently resides in Madrid and is a leading figure for his social media analysis of current Cuban events.
He explains that the economic contraction was greater during the Special Period, but that now, after five years of deep crisis on the island, the “decline is more sustained and there is no way out in sight.”
Cuba is suffering from shortages of basic necessities (food, medicine, fuel), prolonged daily blackouts, high inflation, recession, growing dollarization, mass migration, and a rapid deterioration of living conditions.
“I believe the limits of a centralized planning system’s ability to adjust have been reached,” Monreal analyzes, adding that “after successive modifications that haven’t eliminated the country’s structural problems—but only some of their consequences—the measures adopted by the government have had “decreasing effects.”
“The economy continues to decline, and the crisis has no way out; it can’t be resolved. What is being done is having no result.”
“The economy continues to decline, and the crisis has no way out; it can’t be resolved. What is being done is having no result. Are we at the end of a nearly 60-year-old regulatory model? It is likely,” he replies.
Monreal paints an alarming picture. He highlights the “completely collapsed levels” of agricultural production, which “continue to plummet from the peaks of 2016-2018,” and warns of a “very, very serious” food security crisis.
He also warns about the energy situation, with repeated breakdowns at obsolete thermoelectric plants; the budget deficit; the loss of the driving capacity of the tourism sector; the lack of “productive support” for the Cuban peso; and the 30% collapse in the purchasing power of wages in just four years due to inflation.
In his opinion, Cuba is experiencing a “systemic crisis,” “a profound and protracted alteration of the matrix” of the economic model that affects its foundations. “It’s the type of crisis from which a country cannot recover from within the framework of the system,” he says, lamenting that the country’s leadership does not seem willing to embrace the “radical” nature of the necessary changes.
“Every economic reform is a political act,” emphasizes this economist, who insists that maintaining the planned economy in Cuba “has more to do with political persistence, not so much economic.”
The lack of political action in this area, in his opinion, can only be explained by two reasons. First, the attempt to “preserve power” by the government and the Cuban Communist Party (PCC, the only legal party) because, as in almost all other socialist economies, these needs “dictate the pace and direction of reforms.”
The second, he points out, is the fear that economic changes could modify “institutional functioning,” diversify the interests of elites, and subsequently “fragment” the country’s leadership.
In his opinion, the “calculation” of these elites is that “it is preferable to assume the risk of economic disintegration,” trying to prop up only “the most critical elements,” than to launch “more radical reforms that could completely disrupt” the power structure.
“In Cuba, there is obviously a very high risk that the loss of economic dynamism could drag the population into a social crisis that could turn into a political one, of which there have been glimpses.”
“In Cuba, there is obviously a very high risk that the loss of economic dynamism could drag the population into a social crisis that could turn into a political one, of which there have been glimpses,” Monreal notes.
With respect to the government’s program to correct distortions and boost the economy, which has been implemented piecemeal for almost two years, Monreal points out inconsistencies: “It is an attempt to resolve a structural crisis without substantially changing the framework.”
He believes the program, which primarily included budget adjustment measures and the partial dollarization of the economy, has no chance of achieving its objectives because “it continues to maintain the idea that the system can be rebuilt through modifications—I would say— that are cosmetic.”
One of the measures contemplated in this plan is a reform of the monetary system, which has been deeply strained by the so-called Ordering Task of 2021, a failed attempt by the Cuban government to remove the dollar from the local economy. “It’s a disaster, something that has turned the Cuban economy upside down more than anything else,” Monreal believes.
However, any action in this area now is also complex, he acknowledges. The economist doesn’t believe the government will unify the exchange rates (currently two official ones, both very far from the informal one) or that it could establish a new rate based on fundamentals because it would “starve the country.”
Regarding whether it would be a floating exchange rate, as the government announced at the end of last year, Monreal also has doubts. A “dirty float” between two bands would be more likely, although that would require the central bank to hold foreign currency to defend the rate.
The government has indeed been “successful” in reducing inflation and the public deficit, the economist points out, but this has been achieved “basically by impoverishing the country,” due to the decline in the purchasing power of state workers and cuts in services.
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