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Cuban economy likely to slow down in 2016 | Canindia News

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Cuban economy likely to slow down in 2016

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CanIndia New Wire Service 0 comments

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Havana, Jan 2 (IANS) Cuba’s economy is likely to slow down in 2016, with authorities calling for efficiency and fiscal prudence as the country faces a tough year.

Earlier this week, the Economy and Planning Minister Marino Murillo told the parliament that the Cuban economy would grow by two percent in 2016, down from four percent in 2015, Xinhua reported.

According to his economic report, most of the country’s productive sectors grew in 2015, including the sugar industry (16.9 percent), construction (11.9 percent) and manufacturing (9.9 percent).

However, despite this encouraging performance in 2015, Murillo stated that expectations for 2016 pointed to a deceleration, leading to a mere two percent growth.

“In 2016, it will be crucial to increase efficiency in our spending and seek to benefit from the global trend of lowering prices,” said Murillo, adding that savings should especially be found in imports and energy.

He added that while half of imports in 2016 would depend on loans, these should be chosen “rationally” to ensure “sustainable” debt.

Moreover, he said public investments for 2016 will amount to $7.8 billion, mostly directed at the tourism, energy, oil and gas, and agricultural sectors.

Tourism is considered to be crucial to the development of the Cuban economy, having closed 2015 with a record 3.5 million foreign visitors.

Despite these increases, the Cuban economy grew at an average annual pace of 2.3 percent from 2011-2014, far below government targets of seven percent.

In order to avoid such disappointing results in the long term, Murillo called for “Cuba to produce all that it can. It is better to import raw materials and manufacture a product here, than buying a finished product on the international market.”

Minister of Foreign Trade and Investment Rodrigo Malmierca said it will also be vital to promote Cuba’s export potential in order to stimulate foreign revenue generation in key sectors.

In this aspect, the country is still feeling the impact of the US economic blockade. While a thaw in relations has led to the embassies re-opening and to Washington lifting a number of restrictions, the blockade continues to isolate the island from global markets.

Furthermore, the economic recession suffered by Venezuela, a huge source of financial and commercial support for the island, has left Cuba reeling.

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