February's inflation remains out of control

Inflation continues to take a toll on the Cuban economy. The authorities appear oblivious to the undoubtedly negative effects that a inflation which can already be classified as structural is causing, given its impact, magnitude, and persistence. The data published by the National Office of Statistics and Information (ONEI) regarding the inflation for the month of February is alarming, as seen in Table 1.

Table 1.- Inflation in Cuba during February 2026

The first column indicates the overall inflation index of the economy and each of the highlighted components, using 2010 as the base year for calculations. That said, prices in Cuba have increased more than 5 times over the past 16 years, with the years since 2021, when the so-called Monetary Ordering Task came into effect, showing the greatest inflationary impact. This level of price growth over just three decades illustrates the erosion of assets, deposits, and, in general, all income generated in the Cuban economy, one of the most inflationary in Latin America.

It is important to acknowledge this peculiar behavior of prices on the Island because its impact is so intense that it generates negative effects on productive activity, which are continuously exacerbated and intensified by the inertia, and especially the ineffectiveness, of the Central Bank of Cuba.

Returning once again to the current situation, the second column indicates the increase in prices during the past month of February.

According to the data published by ONEI, overall inflation in the economy increased by 2.58% in percentage terms compared to the previous month. If this rate persists, it projects an annual variation exceeding 15%. The accumulated rate for the first two months has resulted in a price increase of 3.27%, placing the year-on-year variation rate in February compared to the same month last year at 12.33%. These are poor figures to start the year, as in just one month the average CPI (consumer price index) of the economy has not corrected its upward trend, remaining in double digits despite the serious crisis situation. The combination of economic stagnation and unproductivity with stable inflation creates a particularly complex scenario for the economic policy of any country.

The issue lies in what the data indicates regarding the upcoming months. The variation rate of the components that make up the CPI ranges from a maximum value of 8.78% in Transportation to a minimum of -0.03% (decline) in the prices of the Health component. This is another characteristic of the inflation observed in the Cuban economy: the notable variation/dispersal recorded in the price increases among the different components/sectors of the economy. These differences are a factor that undoubtedly complicates the fight against inflation and generates, when certain measures are adopted, negative effects among various productive sectors.

In any case, during February, Transportation has seen its prices soar (in January, the increase was only 0.44%), and this is a factor to consider, not only because of the energy shortage affecting it but also due to the transfer of these price increases associated with mobility to other sectors of the economy.

Table 2.- The Acceleration of Inflation in Cuba (Year-on-Year Rates)

But things are not going as they should, and signs are starting to emerge indicating that prices are out of control, as seen in Table 2.

In fact, the Restaurants and Hotels component gave a scare in February, experiencing an increase in monthly, accumulated, and year-on-year rates compared to January. Specifically, the year-on-year rate rose from 21.14% in January to 22.27% in February, indicating a rise in inflation expectations that will undoubtedly carry over into the coming months.

The same is true for the component of Food and non-alcoholic beverages, which also shows increases in the monthly, accumulated, and year-on-year variation rates compared to January. The year-on-year rate has risen from 12.51% to 14.34%.

It should be noted that Restaurants and Hotels and Non-Alcoholic Beverages together account for more than 60% of the total incidence of the inflation index. The increase they are experiencing suggests that inflationary expectations are entrenched and indicate price increases in the coming months.

The rest of the components of the CPI show upward trends, although with smaller percentages compared to the previous month. However, one should expect a feedback effect on inflation that will drive up prices in Housing Services, Furniture and Household Items, and Miscellaneous Goods. Only Alcoholic Beverages and Tobacco have seen a significant slowdown in inflation in February compared to January, following a decrease in consumption during the New Year festivities.

The uncontrolled inflation is a powerful enemy of economies because it exacerbates the erosion of incomes and the value of assets, contributing to further impoverishing certain sectors of the population, fostering a climate of social discontent and protests against the regime. The limited ability of communist leaders to control and stabilize prices in Cuba is not just a matter of incompetence, but of political decision: much of the inflation on the Island is related to the wastefulness of public accounts and the structural deficit that continues to expand, generating money in circulation that further fuels inflationary tensions.

The outlook is not promising, and there are no indicators in the real economy suggesting that the situation may improve. Cubans will continue to become poorer, in addition, due to rising inflation.