Cuba Business

Cuban economy expected to grow modest 1.5 percent in 2003

Posted May 29, 2003 by publisher in Cuba Business.

Associated Press

HAVANA (AP) — Cuba’s economy should grow a modest 1.5 percent this year as the communist government struggles with the effects of a world crisis on its crucial tourism industry and the price of petroleum, economists here say.

A newly released report from the semi-independent Center for Studies of the Cuban Economy said that 2003 will be the third subsequent year that the nation’s economic growth has fallen below original government expectations. Government officials had originally set 3 percent as their economic growth target for this year.

The center’s 1.5 percent projection is “modest compared with the projections of previous years, but much more in line with the nation’s current reality,’ said the report published in April and released in May.

The annual report analyzes economic indicators from 2002 and makes projections for the Cuban economy through the rest of 2003.

Cuba’s centralized economy, still struggling from the loss of its Soviet bloc trade partners more than a decade ago, grew just 1.1 percent in 2002, according to government figures. Growth was 2.5 percent in 2001 and 5.3 percent in 2000.

The economists who wrote the report said they lacked sufficient information to make projections about sugar and tourism, two key sources of income.

Nevertheless, they said tourism seemed to be bouncing back this year after last year’s slump. About 800,000 people visited Cuba during the first quarter of 2003, up 19 percent from the same period last year, authorities announced earlier this month.

Final figures from the ongoing 2002-2003 sugar harvest have not been made public. But authorities expect an especially small yield after massive restructuring that shut down nearly half of the island’s sugar mills.

The two previous annual sugar harvests each yielded between 3.5 million and 3.6 million metric tons.

Sugar for centuries was the mainstay of the Cuban economy, but has grown less important in recent years as tourism replaced it as the island’s No. 1 source of foreign currency.

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