Our Future? Cuba’s Inflation Rate Through the Roof!

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Cuba Sees 2021 Inflation of 70% Amid Reforms and Import Hikes

Cuba sees inflation finishing 2021 at roughly 70%, driven by painful economic reforms and the increased price of imports, Economy and Planning Minister Alejandro Gil told the National Assembly Tuesday. Gil said the country had been planning for inflation of 60% this year after it rolled out a raft of economic measures in January, including ending a two-tiered currency system and raising prices on key goods.

Even so, he said taming inflation is one of the “main challenges” of 2022. In October, a government official said the economic reforms had led to price increases of as much as 6,900% in the informal market. On Tuesday, Gil called that interpretation “erroneous” saying it was used as an example of how the Cuban peso might have devalued if the state-controlled economy had been “linked” to the non-state economy.

Gil also blamed inflation on U.S. economic sanctions, which he said had resulted in having thousands of containers of undelivered merchandise stuck in international ports. Cuba saw rare outbursts of public protests earlier this year, in part fueled by economic hardship. As tourism dried up amid the pandemic, the economy shrank 11% in 2020. Gil reiterated that the economy would grow 4% in 2022 after expanding 2% this year.

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