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Posted November 27, 2007 by publisher in Business In Cuba

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Marc Frank | Reuters

Cuba’s economy is expected to grow about 10 percent in 2007, fueled by a jump in factory and farm output, in the country’s third straight year of double-digit growth, the official media reported on Tuesday.

“This year’s plan is 10 percent and we are going to come in around that figure,” Economy and Planning Minister Jose Luis Rodriguez said at a meeting of economists on Monday, parts of his speech broadcast on state-run radio on Tuesday.

Rodriguez gave few details, simply stating “there is an important jump in industrial and agricultural production.”
A local economist said above normal rainfall since late 2006 has boosted agricultural production after a severe drought in 2004 and 2005 caused a 30 percent decline in output.

The economist, who asked not to be named, said massive investment in the energy grid had put an end to power outages that seriously interrupted industrial production in the past.

Tourism, the driving force behind the economy and main foreign exchange earner until service exports overtook it in 2005, declined by 9 percent through August, an industry source said. There was no growth in sugar output in 2007, though the crop has long since become secondary to the economy.

Cuba reported gross domestic product growth of 12.5 percent in 2006 and 11.8 percent in 2005, based on a locally devised formula that estimates the market value of free social services and subsidized goods and services. It also includes massive medical and other services exported mainly to Venezuela.

The U.N. Economic Commission for Latin America and the CIA estimate that this formula overstates Cuba’s gross domestic product by between three and four percentage points.

Cuba’s GDP contracted 35 percent when the Soviet Union collapsed, depriving it of massive subsidies and resulting in shortages of food, energy, transportation and capital.
Over the last four years communist-run Cuba has spent billions of dollars to improve its crumbling energy grid and other infrastructure and recover from years of crisis despite stepped up U.S. economic sanctions.

Cuban imports have doubled since 2003 as foreign exchange earnings jumped, due mainly to payment for medical services exported to Venezuela, soft credits from China, and increased revenues from nickel and pharmaceutical exports.

Foreign trade totaled $12.18 billion in 2006, with exports of $2.76 billion and imports of $9.42 billion, the government reported. The trade deficit was offset by more than $6 billion in revenues from services. For more statistical details on the Cuban economy through 2006, go to http://www.one.cu, the Web site of the Cuba’s statistics agency.

(Edited by Anthony Boadle and Walker Simon)

  1. Follow up post #1 added on November 27, 2007 by publisher with 3905 total posts

    I highlighted the tourism part so it would be easier to read. Interesting that it was buried deep in the article.

    One would have to ask why tourism is down 9%. That is a substantial number. Apparently Marc Frank did not want to point it out like I did.



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  2. Follow up post #2 added on November 27, 2007 by manfredz with 464 total posts

    i dont know what story is in 2007, but notice from their statistics agency site that from 2005 to 2006 tourism was down by about 100,000.  When you look at the page that breaks tourism down by country of origin, Venezuela shows a drop of about 100,000.


  3. Follow up post #3 added on November 28, 2007 by Yeyo with 411 total posts

    Cuban Economy grows 10%??? Why not 20 or 30 or better 50%?
    Those numbers are part of an old game played inside the inner Cuban government to make Castro and his friends happy, trying to convince themselves that things are not as bad as everybody says.
    The fact and the matter is that the Economy but most importantly the people in Cuba are worst than last year, worst than two years ago, 10 years ago and much worst than 50 years ago.
    The Economy is simply in ruins and nobody believe those numbers nor even Mr. Jose Luis Rodriguez himself, Lage, the Castro brothers or even Chavez who is keeping the country alive.


  4. Follow up post #4 added on November 28, 2007 by publisher with 3905 total posts

    Especially with the crown jewel of tourism being down 9%. I guess when you are getting cheap oil and buses and appliances on credit, it looks like everything is just fine.

    I suppose the economy was growing by 10% in the 1980s too when the Russians were there.



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