- Title: Cuba says taming inflation a priority as recovery begins
- Date: 21st December 2021
- Summary: HAVANA, CUBA (DECEMBER 21, 2021) (REUTERS) PEOPLE WALKING IN HAVANA STREET PEOPLE WALKING NEXT TO FOOD MARKET SALESMAN WEIGHING PORK MEAT (SOUNDBITE) (Spanish) HAVANA RESIDENT, ODETTE RODRIGUEZ, SAYING: "Everything has gone up in price; it is not affordable. The price does not match salaries; we cannot buy even though wages have increased." (SOUNDBITE) (Spanish) HAVANA RES
- Embargoed: 4th January 2022 19:23
- Keywords: Cuba Havana President Miguel Diaz-Canel economy inflation
- Location: HAVANA, CUBA
- City: HAVANA, CUBA
- Country: Cuba
- Topics: South America / Central America,Government/Politics
- Reuters ID: LVA003F8ZBQYV
- Aspect Ratio: 16:9
- Story Text: Communist-run Cuba will move to control soaring prices and ease shortages as recovery from a pandemic-driven recession takes root, Economy Minister Alejandro Gil told a year-end session of the National Assembly on Tuesday (December 21).
Cuba's ailing, inefficient state-run economy shrank 10.9% in 2020 as the pandemic shuttered tourism, coupled with harsh new sanctions imposed by the Trump administration that withered foreign exchange.
Officials expect it to recoup just 2% in 2021.
One key issue, said Gil, was inflation, which Cuba's government pegs at 70% but experts say is much higher.
Gil said "restoring the peso's value and role in the economy" would be vital to hitting a targeted 4% expansion of the economy next year.
The U.S. dollar has soared on Cuba's black market to around 75 pesos, more than triple the official exchange rate of 24 pesos. The peso collapsed this year after Cuba dumped a dual-currency system that maintained one currency on par with the dollar and another weaker currency for domestic use.
Gil said hiking salaries would only increase the inflationary spiral and Cuba could not import cheap goods to buy its way out of the crisis because it does not have the hard currency to do so.
Instead, he said, measures adopted this year that would boost growth and increase domestic production, such as granting greater autonomy to state businesses and legalization of small and medium-sized private ones, would help keep prices down for Cubans already suffering shortages.
The reports of three economists surveyed by Reuters estimated inflation in a range between 100% and 500%.
(Production: Mario Fuentes, Anett Rios Liamar Ramos) - Copyright Holder: REUTERS
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