Economist Elías Amor issued a warning on Thursday regarding Cuba's fiscal deficit, which exceeds 12% of the GDP. He highlighted that during Miguel Díaz-Canel’s address at the Extraordinary Plenary of the Communist Party's Central Committee on Wednesday, there was talk of "stabilizing the economy" without addressing the real underlying issue: rampant inflation.
"The economy is sinking, the GDP is declining, and at the same time, prices are soaring. Yet, Díaz-Canel failed to mention any of this," Amor emphasized during an interview with Tania Costa, where they discussed the 23 pillars and 176 economic reform proposals presented by the regime at the plenary.
The Mechanism Behind the Economic Imbalance
Amor detailed the mechanism sustaining this imbalance. He explained that the deficit arises from the gap between the Cuban government's tax revenue and its expenditures, which is patched up in a singular way.
"How is this deficit addressed? By printing money, because when revenues don't cover expenses, the gap is filled by running the printing press," Amor noted.
The crux of the issue is that this newly minted money does not reach the population but instead ends up in the state's coffers.
"This money doesn't reach the citizens, making them poorer as inflation rises and prices continue to impoverish them," the economist stressed.
The Vicious Cycle and Lack of Incentive
Amor also pointed out that the regime lacks any incentive to cut public spending as it controls the mechanism that funds its excesses. "The state makes no effort to tighten its belt because, with control over the Central Bank, no one can question its behavior."
This vicious cycle—more money printing, more inflation, more impoverishment—was precisely what Díaz-Canel failed to explain at the Central Committee's Plenary. Official inflation for 2025 closed at around 14-15%, but Amor warns it could climb to 30-40% if the fiscal-monetary imbalance isn't corrected.
Unseen External Deficit
In addition to the internal deficit, there's another one kept under wraps by the regime, the external deficit, which is the gap between Cuba's exports and imports.
"We have no information about the external deficit. We don’t know the state of foreign trade since 2024. We know it’s been bad, very bad, because all engines of foreign trade have been declining," Amor stated, estimating that this second deficit "could also be quite substantial."
Available data corroborates these concerns: in 2024, Cuba exported $1.474 billion and imported $8.071 billion, resulting in a merchandise trade deficit of nearly $6.6 billion.
The Cuban budget for 2026, approved in December 2025, already established a maximum deficit of 74.5 billion Cuban pesos, with projected revenues of 484.121 billion against expenditures of 550.59 billion. While the regime forecasts a 1% GDP growth, the Economist Intelligence Unit predicts a 7.2% decline, and ECLAC projects a 6.5% contraction for the year.
In this setting, the average Cuban salary in 2025 was merely 6,930 pesos monthly—equivalent to five to 15 dollars at the informal exchange rate—while meeting basic needs requires more than 50,000 pesos each month.
Amor was unequivocal in his assessment of Díaz-Canel's plan: "This is nothing more than empty promises, not a standard economic policy program. It has technical flaws, but it also has political shortcomings that will hinder achieving the stated objectives."
Understanding Cuba's Economic Challenges
What is causing Cuba's inflation issue?
Cuba's inflation is primarily driven by excessive money printing to cover the fiscal deficit, which arises from the gap between government revenues and expenditures.
Why does the Cuban government lack incentives to reduce spending?
The Cuban government has no incentive to reduce spending because it controls the monetary system through the Central Bank, allowing it to fund excesses without external accountability.
What is the impact of Cuba's external deficit?
Cuba's external deficit, the gap between exports and imports, exacerbates the economic situation by adding to the overall financial imbalance and reducing the country's ability to sustain its economy.