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The recent agreement between the Cuban government and the Paris Club, reached on January 17, 2025, accounts for only 16.2% of the island's total debt, estimated at 28.5 billion dollars at the end of 2023.
Although this refinancing provides temporary relief, the magnitude of the total debt remains a crucial challenge for the Cuban economy, which is facing a deep crisis and increasing its bad reputation among creditors and international partners.
According to the Cuban economist Pedro Monreal, the debt renegotiated with the Paris Club, which amounted to 4.62 billion dollars at the end of last year, is just a fraction of the island's total financial obligations, which includes both official and private debt.
Despite its relatively small size, this agreement is crucial for temporarily mitigating the default on sovereign debt, a factor that directly influences Cuba's "country risk" and its access to international financing.
The context of Cuba's debt with the Paris Club
Cuba has historically maintained a complex relationship with the Paris Club, a group made up of 14 creditor countries, including France, Spain, Japan, and the United Kingdom.
In 2015, the island achieved a significant debt forgiveness, reducing a liability from 11.1 billion dollars to 2.6 billion, with a staggered payment plan extending until 2033. However, the ongoing economic crisis has made it difficult to meet these commitments, leading to renegotiations in 2021 and 2025.
The most recent agreement, signed in Paris by Vice Prime Minister Ricardo Cabrisas and representatives of the Paris Club, alters the previously established terms in an effort to ease the financial pressure on the island.
During the meeting, the Cuban delegation presented the complex economic situation of the country, characterized by the contraction of GDP, a shortage of foreign currency, and the prolonged impact of the post-pandemic crisis, as well as U.S. sanctions.
Economic and financial repercussions
While refinancing with the Paris Club offers short-term relief, Cuba's overall debt remains an unsustainable burden.
The analysis entity The Economist Intelligence Unit (EIU) estimated that the country's total debt would close 2024 at 28.7 billion dollars, a figure that, according to experts, severely limits the possibilities of economic recovery.
Cuba also faces difficulties in accessing new financing due to its history of defaults and the lack of transparency in its public accounts.
The restructuring of the debt with the Paris Club could temporarily improve the perception of risk, but it does not address the structural issues of the Cuban economy, which continues to rely on external sources of financing and remittances.
The challenges ahead
The Cuban government has committed to a strategy of continuous renegotiation of its foreign debt, in an effort to buy time in light of the liquidity crisis.
However, economists warn that without deep structural reforms to encourage foreign investment, increase productivity, and diversify sources of income, the island will remain trapped in a cycle of indebtedness and restructuring.
In this context, the new agreement with the Paris Club is seen as a temporary solution that does not address the underlying causes of the Cuban economic crisis. The country continues to face a growing fiscal deficit, uncontrolled inflation, and a decline in production in key sectors such as tourism and agriculture.
In conclusion, although the agreement with the Paris Club represents a positive step to avoid an immediate financial collapse, Cuba's total debt remains a significant issue.
The economic sustainability of the island will depend on its ability to generate its own income and the implementation of policies that promote growth and long-term stability, with sufficient credibility to open doors to funding from public and private international entities.
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