Dismal scenario: Government admits that the Cuban economy is in free fall

If there was one thing made clear this Wednesday during the Fifth Ordinary Session of the Tenth Legislature of the National Assembly of People's Power, it is that the Cuban economy is still in freefall, with a sustained contraction of the gross domestic product (GDP), a persistent shortage of foreign currency, fuel, and food, and an increasing productivity gap compared to 2019.

The official Cubadebate reported that the Minister of Economy and Planning, Joaquín Alonso Vázquez, presented a report to the deputies that openly acknowledges that the country has not managed to recover its pre-pandemic economic levels.

According to reports, by the end of 2024 the economy recorded a decline of 1.1% in GDP at constant prices, resulting in several consecutive years of recession.

Compared to 2019, the contraction reaches 11%, with alarming declines of 53% in primary activities (agriculture, livestock, and mining), 23% in secondary activities (manufacturing and sugar industries), and 6% in tertiary activities, which include social services such as education.

Although the report primarily blames the U.S. embargo and external factors such as the pandemic or the global economic crisis, the minister also acknowledged the existence of “internal errors, deviations, and negative trends” that have affected economic management at both macro and microeconomic levels.

Alonso explained that the current situation creates structural imbalances that are reflected in high inflationary pressures, a fragmented currency market and critical foreign exchange restrictions, energy, and fuel, which hinder production, services, and industrial activity in general.

Even with this data, he insisted on the triumphalist narrative that the Government continues to implement transformations to “correct distortions” and “revitalize” the economy in 2025.

Regarding the performance of the first half of 2025, the report reflects a similarly adverse situation: export revenues were achieved at 91%, but were 7% lower than in the same period of the previous year.

The export plan for goods was executed at only 62%, compared to 78% in 2024, emphasized the head of the department.

The country managed to recover sectors such as tobacco and lobster, but saw declines in other key areas such as nickel, honey, shrimp, and biopharmaceutical products, which were affected by shortages of supplies, energy, fuel, and logistics.

In the tourism sector, another strategic area, the country only received 71% of the expected visitors, which represents a 77% compared to the first half of 2024.

Figures that contrast with the regime's intention to continue investing in a sector that, although crucial, is not managing to take off in its recovery.

The decline has been attributed to airline cancellations, infrastructure problems, shortages, and international campaigns that affect the image of the destination Cuba, as it is easier for the regime to look for reasons "outside" rather than in its own backyard.

Tourism services exports also fell by 18% compared to the previous year.

In parallel, the government is trying to stimulate exports and production through self-financing schemes in foreign currency.

According to the minister, 29 schemes have already been approved for sectors such as mining, coal, honey, and aquaculture, although the results have not yet succeeded in reversing the overall decline.

It also highlighted a 30% increase in exports from non-state management forms, which generated 21 million dollars, led by small and medium-sized enterprises exporting charcoal and IT services.

On the import side, the data shows that targets were met at 67%, with a decrease in food volumes compared to 2024, although purchases of machinery and equipment increased.

Imports from the non-state sector exceeded 1 billion dollars, a 34% increase compared to last year, dominated by small and medium-sized enterprises (mipymes), despite the fact that the regime tightly controls this sector.

At the fiscal level, the minister assured that the limited financial resources available have been allocated to prioritized payments: food, medicine, fuel, recovery of the electrical system, defense, and national security, even though these "efforts" may not be appreciated.

Still, he acknowledged that the operational management has been "extremely complex" in a crisis management context.

Despite the grim outlook, the government is betting on a gradual recovery supported by structural transformations, investment in renewable energy, reorganization of the business sector, and a boost to exports.

But until now, the gap between projections and reality has only widened, as the population faces increasing difficulties in meeting their basic needs.

Frequently Asked Questions about the Economic Crisis in Cuba