The plight of Cuba's state-run economy intensified dramatically in the first five months of 2026. By the end of May, a staggering 399 companies had reported financial losses, marking an increase of 120 compared to the same period last year, according to the latest report from the National Office of Statistics and Information (ONEI).
This figure indicates a 43% rise from the 279 deficit-ridden entities reported between January and May 2025. In addition, it's 23 more than the number recorded by the end of April this year, when the total was 376, a monthly increase of 6.1%.
Decline in Sales and Profits
Nevertheless, the mere numbers are just a fragment of a much more alarming picture. The official report reveals a widespread deterioration in key indicators of the state-run enterprise system: declining sales, reduced production, shrinking profits, decreasing efficiency, and dwindling employment.
All this occurs as the government implicitly acknowledges the severity of the situation and prepares reforms that, for the first time in decades, include the possibility of liquidating unviable state-owned enterprises and introducing private capital in some.
ONEI data indicates that net sales of goods and services fell from 650.311 billion pesos between January and May 2025 to 460.578 billion pesos in the same period this year. This represents a decrease of 189.733 billion pesos, or 29.2%.
Pre-tax profits were not immune to the decline either, dropping from 97.628 billion to 66.922 billion pesos, a reduction of over 30.700 billion pesos, translating to a 31.5% decline compared to the previous year.
Simultaneously, the production of goods and services fell by 11.4%. Within the state enterprise sector, the decline was even steeper, nearly 14%, as figures dropped from 397.837 billion to 342.087 billion pesos.
Increasing Number of Companies in the Red
The gross value added also slipped, and the overall efficiency of the enterprise system fell from 50.2% to 45.9%, highlighting a diminishing ability to generate wealth with available resources.
The ONEI report accounts for 2,774 business entities. Of these, 1,770 showed profits while 399 reported losses. However, a more detailed analysis is warranted.
ONEI additionally categorizes 603 companies as "unclassified," representing almost 22% of the total. This means that one in five entities had not officially determined their economic outcome by the end of the period.
The state sector's outlook also worsens. While there were 252 state-owned companies with losses in 2025, this year the number rose to 363, a nearly 44% increase.
The total reported losses exceed 5.300 billion pesos, with around 3.300 billion directly tied to state enterprises. Although the total state losses are slightly lower than the previous year, the sharp rise in deficit companies indicates that the crisis has permeated a larger portion of the public business fabric.
Havana Leads in Deficit Companies
The territorial distribution further reflects the problem's breadth. Havana tops the list with 69 companies in the red, accounting for 17.3% of the national total.
Following are:
- Matanzas: 33
- Granma: 33
- Villa Clara: 32
- Camagüey: 32
- Holguín: 26
- Santiago de Cuba: 26
- Pinar del Río: 23
- Ciego de Ávila: 23
- Sancti Spíritus: 20
- Cienfuegos: 18
- Artemisa: 17
- Guantánamo: 17
- Mayabeque: 14
- Isla de la Juventud: 3
The top five provinces almost account for half of the country's deficit companies. However, the absolute number doesn't reveal which territories are more efficient, as ONEI does not provide data on the total number of state companies in each province or the percentage of those running at a loss.
Another significant detail in the report is that Holguín was the only province to close the period with aggregate pre-tax losses exceeding 101 million pesos.
Fewer Workers and Lower Productivity
The crisis is likewise visible in employment figures. The number of employees in the enterprise and budgeted system dropped from 2.28 million to 2.14 million, a reduction of over 142,000 jobs compared to the year before.
In the enterprise system, the decrease was about 95,000 workers. Although the average monthly salary nominally increased to 8,125 pesos, this rise loses significance amid high inflation, the continuous devaluation of the Cuban peso, and the rising costs of food and basic goods.
Meanwhile, enterprise productivity steadily declined during the period, while wage expenses per peso of wealth generated increased.
Government Acknowledges the Model's Failure
These figures emerge just weeks after the government announced a shift that would have been unthinkable years ago. As reported by CiberCuba, the regime is preparing a package of changes allowing for the bankruptcy, liquidation, merger, or restructuring of persistently loss-making state-owned companies, a step aimed at easing the financial burden of hundreds of unproductive entities on the public budget.
The reform also includes transforming some state enterprises into commercial companies and enabling Cubans residing on the island, emigrants, private actors, and even foreign investors to acquire shares in certain firms, though the State will maintain control over sectors deemed strategic.
In practice, this announcement signals an acknowledgment that the state enterprise model, sustained for decades through subsidies and public funding, is facing a structural crisis that the government can no longer conceal.
A Crisis Extending Beyond Businesses
The troubles of the enterprise system cannot be viewed in isolation. In recent years, the Cuban economy has suffered a severe contraction characterized by prolonged blackouts, fuel shortages, a decline in tourism, reduced agricultural and industrial production, chronic currency shortages, and inflation that has eroded the public's purchasing power.
State enterprises operate in an environment marked by administrative controls, limitations on importing supplies, difficulties accessing foreign currency, and increasing decapitalization of productive infrastructure. All these factors undermine the ability to produce, sell, and generate profits.
The result is a vicious circle: companies produce less, sell less, earn less revenue, and increasingly rely on financial backing from the State, precisely when public finances are also in deep crisis.
Official statistics confirm the deterioration. For years, the Cuban regime avoided publicly acknowledging the extent of the state sector's problems. However, the data now published by ONEI paints an undeniable picture.
Not only are more companies running at a loss, but sales are down, profits are falling, production is declining, productivity is dropping, and thousands of jobs are disappearing.
In this context, the reforms announced by Miguel Díaz-Canel's administration seem more like an attempt to relieve an unsustainable financial burden than a comprehensive economic opening strategy. The big question is whether allowing the liquidation of some companies and the limited entry of private capital will suffice to reverse a crisis affecting the entire state economic model, or if it will merely be an effort to redistribute assets without addressing the structural causes that have led the Cuban enterprise system to its current predicament.
Understanding the Crisis in Cuban State Enterprises
What is causing the financial losses in Cuban state companies?
The losses are due to decreased sales, reduced production, falling profits, and declining efficiency. Administrative controls, supply import restrictions, and currency shortages exacerbate these issues.
How is the Cuban government responding to the economic crisis?
The government is planning reforms that allow for the liquidation of unviable state enterprises, the entry of private capital, and the creation of commercial companies, while maintaining control over strategic sectors.
Which regions in Cuba have the highest number of deficit companies?
Havana leads with the most deficit companies, followed by Matanzas, Granma, Villa Clara, and Camagüey. These regions collectively account for nearly half of the country's deficit companies.