A recent report by the Economic Commission for Latin America and the Caribbean (ECLAC) forecasts an additional two years of severe economic hardships for Cuba, placing the nation among the worst in the continent regarding economic performance and inflation stability. The report predicts a 1.5% decline in Cuba's economy by 2025, followed by an almost stagnant growth of just 0.1% in 2026. As per Cuban economist Pedro Monreal, only Haiti is expected to show worse economic indicators in the region.
The study also identifies Cuba as one of the five Latin American countries with "chronic inflation," ranking it as the third highest on the continent by 2024. Due to this situation, Cuba was excluded from regional and subregional average calculations, highlighting the severity of its inflation crisis.
These findings corroborate previous warnings from independent analysts who have highlighted Cuba's precarious situation, characterized by rising debt, collapsing productivity, an expanding informal market, and a sustained loss in purchasing power. While the ECLAC report does not explicitly mention specific government policies, it suggests that the current levels of structural distortion and liquidity shortages will hinder any sustainable recovery in the near term.
The situation is further compounded by limited access to external financing and low levels of foreign investment, amidst a complex geopolitical landscape. ECLAC's forecast comes at a time when Cuban authorities persist with their "gradual recovery" plan, while the population continues to face chronic shortages of food, medicine, energy, and transportation, marking one of the worst crises since the 1990s.
Overall, ECLAC warns that the Latin American and Caribbean region remains in a prolonged period of low growth, with real GDP expected to grow by an average of 2.2% in 2025 and 2.3% in 2026, maintaining the rates seen in 2023 and 2024. Even the Cuban government has officially admitted that the nation's recovery is still a long way off.
"Much remains to be done," acknowledged Prime Minister Manuel Marrero Cruz when presenting the results of the "Government Program to Correct Distortions and Relaunch the Economy" before the National Assembly of People's Power. Despite being couched in triumphant language, this acknowledgment reveals the strain on the current economic model and the government's inability to reverse a situation that many Cubans experience daily: prolonged power outages, shortages, uncontrolled inflation, and growing uncertainty about the future.
Understanding Cuba's Economic Challenges
What are the main economic challenges facing Cuba?
Cuba is grappling with rising debt, collapsing productivity, an expanding informal market, and a sustained loss in purchasing power. These issues are compounded by limited access to external financing and low foreign investment.
How is inflation affecting Cuba?
Cuba is experiencing chronic inflation, ranking as the third highest in Latin America by 2024. This severe inflationary crisis has led to the country's exclusion from regional and subregional average calculations.
What is the Cuban government's plan for economic recovery?
The Cuban government is promoting a "gradual recovery" plan. However, the effectiveness of this plan is in question given the ongoing shortages and economic issues faced by the population.