Posted November 17, 2003 by publisher in Cuba Business.
By Anthony Boadle | Reuters
HAVANA, Nov 17 (Reuters) - The Cuban government expects economic growth to exceed its 1.5 percent target for 2003, helped by high nickel prices, recovering tourism and good weather, Economy Minister Jose Luis Rodriguez said on Monday.
“Growth will be higher this year, thanks to higher performance in some areas, such as agriculture, and a favorable international environment,” the minister told Reuters in an interview.
Last week, the president of the Economic Affairs Committee of Cuba’s National Assembly, Osvaldo Martinez, predicted GDP growth would speed up to 2 percent by year’s end.
“That’s their estimate. We have no figure yet,” Rodriguez said. He added: “No doubt it will be higher than the 1.5 percent we planned for this year.”
The Atlantic hurricane season appears to have avoided Cuba this year, after damaging storms caused havoc with crops in 2001 and 2002. “The rains have behaved well and agricultural output is strong,” Rodriguez said.
The brightest development for Cuba has been higher world prices for nickel, pushed up by tight supply and growing demand, mainly due to China’s industrialization.
Three-month nickel hit a 14-year peak of $12,500 a tonne on Friday on the London Metal Exchange.
Nickel has exceeded sugar as Cuba’s top export and the Cuban sugar industry is still reeling from the closure of half its unproductive sugar mills last year.
Tourism, Cuba’s largest source of foreign currency and main engine of its economic activity, continues to recover from the slump caused by the Sept. 11, 2001 attacks on the United States, Rodriguez said.
Cuban officials said tourist arrivals grew 15 percent in the first six months of this year. In 2001, 1.7 million tourists visited the Caribbean island and generated $1.85 billion, accounting for 40 percent of Cuba’s foreign exchange earnings.
After a growth spurt of more than 6 percent in the 1999-200 period, growth in Cuba’s centrally planned economy slowed to 3 percent in 2001 and 1.1 last year.
Cuba has still not fully recovered from the collapse of its ally and economic patron the Soviet Union, which obliged President Fidel Castro’s communist-run government to legalize the dollar and open up to tourism and foreign investment.
European diplomats in Havana forecast 1.5 percent growth for this year but said this was insufficient to compensate for the decline of the sugar harvests to 70-year lows and paltry foreign investment, which has slowed to a trickle.
Cuba has turned to Latin America for cheaper oil imports and new investment.
But a visit to Havana by Brazil’s leftist President Luiz Inacio Lula da Silva in September did not produce any new investment or credit, which is badly needed to overcome Cuba’s liquidity crisis.
The Brazilian state-run oil company Petrobras
(nyse: PBR - news - people) has reopened offices in Havana and is conducting a feasibility study on whether to renew exploration for oil in the Gulf of Mexico after an exploratory well drilled three years ago bore no results.
A Petrobras representative said the study will take six months. “We will have a ‘yes’ or ‘no’ in the first quarter of 2004,” he said.
No comments have been posted yet.