The Cuban economist Pedro Monreal clarified this Saturday several key aspects of the announced increase in pensions in Cuba, stating that without a corresponding growth in the supply of goods, the purchasing power of the beneficiaries will quickly erode.
The announcement -expected to begin in September 2025, involving an additional annual expenditure of 22 billion pesos- was confirmed by Prime Minister Manuel Marrero Cruz, who reported via X that the Minister of Finance and Prices, Vladimir Regueiro, will soon appear on television to provide details about the scope and the implementation of the measure.
Monreal pointed out that, although it has not been officially explained, the relative "reduction" of social security spending in proportion to GDP has created a fiscal space that would allow for the increase to be financed without generating new deficits.
According to data presented at the National Assembly, the fiscal deficit at the end of the first semester was 29.2 billion pesos lower than planned, which could cover the 7.3 billion CUP that the measure would cost between September and December 2025.
In a thread on his X account @pmmonreal, the economist outlined four fundamental aspects that should be explained by the authorities:
1- Sustainability until 2025: Will the fiscal "buffer" remain throughout the rest of the year and into 2026 to support the increase without resorting to additional deficits?
2- Outlook for 2026: Is another adjustment to pensions expected next year in light of an official inflation rate of 15%, which underestimates the real increase in prices?
3- Structural reform of the system: Is a modification of the current social security budget model, which has a structural deficit of 1 to 3% of GDP, being considered?
4- Protection of purchasing power: Will there continue to be sporadic increases, or will an automatic adjustment mechanism be adopted to maintain the real value of pensions against inflation?
Although the increase does not imply a direct monetary emission, Monreal warned that the injection of 22 billion pesos into aggregate demand could put pressure on prices, especially in a domestic food market that is already facing serious supply constraints.
This figure represents 60.8% of the total state food sales in 2024, estimated at 36.2 billion CUP.
In this context, the expert warned that without a corresponding growth in the supply of goods, the purchasing power of the increase in pensions will quickly erode, limiting its real impact on the lives of the beneficiaries, in this case the retirees on the island.
The decision, announced by Marrero during a live broadcast on the YouTube channel of Canal Caribe, will benefit 1,324,599 people, which represents 79% of the pensioners in the country.
Eighty-two percent of them, that is, those who earn up to 2,472 pesos, will receive an increase of 1,528 pesos, which in practice will double the minimum pension currently received by 438,572 retirees, equivalent to 33.1% of the total.
The other 18% of beneficiaries will see their pension increased to the necessary amount to reach 4,000 pesos per month, which has been set as the limit for this stage.
While the measure will cover retired individuals due to age, disability, as well as those receiving a unified pension due to the death of a spouse; in practice, with the high level of inflation, it will not even meet the most basic needs of retirees.
Frequently asked questions about pension increases in Cuba
When will the increase in pensions in Cuba be implemented?
The increase in pensions in Cuba is scheduled to commence in September 2025. This measure will benefit 1,324,599 individuals, representing 79% of retirees in the country. However, there are concerns about the sustainability of this increase and its potential impact on inflation.
What will be the impact of the pension increase on inflation in Cuba?
Although the increase in pensions does not imply a direct monetary emission, the injection of 22 billion pesos into aggregate demand could put pressure on prices, especially in an internal food market with serious supply constraints. This could quickly erode the purchasing power of the increase for retirees.
What specific changes will be made to pensions in Cuba?
82% of pensioners, that is, those receiving up to 2,472 pesos, will receive an increase of 1,528 pesos, effectively doubling the current minimum pension. The remaining 18% will see their pension increased to reach 4,000 pesos per month, an amount set as the limit for this phase.
Why is the increase in pensions in Cuba criticized?
Despite the increase, there are doubts about its effectiveness given the high inflation and shortages in the country. Without an equivalent growth in the supply of goods, the increase may not significantly improve the lives of retirees. Furthermore, the measure is viewed as a temporary fix that does not address the structural deficit of the social security system in Cuba.
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