Economic Analysis


Population 11.3 million
GDP per capita 9,478 US$
Country risk assessment
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major macro economic indicators

  2020 2021 2022 (e) 2023 (f)
GDP growth (%) -10.9 1.3 3.2 4.6
Inflation (yearly average, %) 18.5 152.0 30.0 50.0
Budget balance (% GDP) -17.7 -11.7 -5.7 -4.5
Current account balance (% GDP) 0.9 -5.7 -5.1 -3.4
Public debt (% GDP) 59.3 117.1 118.9 123.0

(e): Estimate (f): Forecast


  • Tourism and mining sectors (nickel, cobalt) and agricultural potential (sugar, tobacco)
  • Opening of agriculture, trade, catering and construction to the individual and cooperative private sector
  • Skilled and inexpensive labour force
  • Good medical and educational sectors
  • Relatively good social indicators
  • Low crime and anti-corruption initiatives
  • Dialogue and cooperation agreement with the European Union


  • External vulnerabilities (climate, raw materials)
  • Low productivity of the public sector and agriculture
  • Weak investment and infrastructure
  • Very cumbersome administrative process and trade regulation still very recent
  • State control over wholesale trade, credit, and foreign trade and investment
  • Commodity subsidies weighing on public spending
  • Reduced access to external finance
  • Large shortages

Risk assessment

Inflation and Hurricane Ian dampen growth

Cuba's economic situation continued its slow improvement in 2022. Consumption benefited from the efficiency gains of the 2021 currency unification and the full vaccination of the population against Covid-19. Households benefited from the resumption of expatriate remittances. Global demand for nickel and cobalt boosted mining exports (39% of exports). External demand for sugar helped agricultural exports (14% of exports). The recovery of tourism to pre-pandemic levels supported growth. However, declining public consumption and continued US sanctions have dampened this improvement. The trend for 2023 should be confirmed and growth is expected to accelerate. Remittances from the Cuban diaspora is likely to return to their pre-pandemic level.  In addition to tourism (10% of GDP in 2018), exports of medical devices and of the Soberana 2 and Abdala vaccines against Covid-19 to South-East Asia and Venezuela will consolidate the trade balance. The urbanisation plan for the Mariel development zone would benefit the construction sector. Private investment should benefit from the efficiency gains of currency unification and moderate liberalisation of the economy. However, the Biden administration will not repeal the Helms-Burton Act that sanctions foreign investment.   Moreover, household consumption will remain fragile, burdened by food and energy inflation. The war in Ukraine will aggravate the food shortage.  Due to the continuing US embargo, the free retail market will not improve the island's food supply. Last, Hurricane Ian in September 2022 was the worst hurricane to hit the island in 20 years. Damage to road and electricity infrastructure will affect business. International aid (USD 7.8 million from the UN and USD 2 million from the Biden administration) provided only ad hoc support in late 2022. The government's reconstruction plan of at least USD 2 million will not be sufficient to remediate all the damage in 2023.


Limited improvement in public and current account balances

The debt ratio has jumped since monetary unification, which led to a downward revaluation of GDP. The country defaulted in 2020 despite a debt restructuring agreement signed in 2015. A second agreement was reached with the Paris Club in 2021 that allowed Cuba to repay its 1986 sovereign default in 2015. The proceeds wiped out USD 8.5 billion of the USD 11.1 billion debt, with the rest being converted into investment projects and phased in until 2033. held addition, in 2021 the London Club offered a 60% haircut on the debt mainly by the investment fund CRF Ltd. However, in 2022 the Cuban government chose to take the fund to court, accusing it of bribing agents of the National Bank of Cuba to buy Cuban debt at a low price. The case will be heard in 2023 by the British courts.

In this context, the public deficit should continue to decline. Tourism and the end of Covid-19 expenditure will increase revenues. Fiscal austerity will target operating expenses. The Cuban government will focus its spending on infrastructure to attract FDI. Capital spending would offset the damage from Hurricane Ian. Domestic bond issuance will mainly finance this deficit. Bilateral financing will continue to be very scarce due to the continued imposition of US sanctions. Venezuela will not be able to finance the Cuban deficit. Chinese investors will remain cautious.

On the external accounts, the deficit will improve only slightly. The stabilisation of the CUP will not increase the import bill. Mining exports (nickel) will suffer from the global slowdown. However, pharmaceutical and agricultural exports (tobacco, rum, sugar) should increase due to a rebound in Asian demand in 2023. The same will be true for services exports, driven by a recovery in tourism. The US slowdown will not allow diaspora remittances to return to their pre-pandemic levels. FDI will remain limited due to continued US sanctions. The current account deficit will be mainly financed by domestic bond issuance.


Tensions amid an inflationary backdrop

Miguel Díaz-Canel has been President of the Republic of Cuba (a one-party Communist state) since October 2019. The Communist government has remained in office despite the July 2021 protests against high living costs, food shortages and repression of artists. Protests broke out across the country in the summer of 2022. The population expressed its dissatisfaction with respect to power outages and food shortages. This unstable climate is accelerating the expatriation of young Cubans, particularly to the United States.

From the point of view of foreign relations, Cuba is suffering from the American sanctions inherited from the Cold War. The lack of normalisation of its relations with the Biden administration adds to the island's regional isolation. Accordingly, its Venezuelan ally is penalised by its difficult domestic context. In the wake of its own economic slowdown, China is reticent about making new investments on the island. Moreover, Cuban support for Russia in the war in Ukraine is deepening  the island country’s isolation from the world stage.


Last updated: June 2023

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