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The Cuban government announced a profound reform of its pricing policy which effectively marks the abandonment of one of the historical pillars of the centralized economy: the administrative setting of prices based on production costs and the widespread controls imposed by the state.
The measure is part of the package of economic transformations presented by Prime Minister Manuel Marrero Cruz to the National Assembly of People's Power (ANPP), amid an economic crisis that the regime itself acknowledges as the most severe since the Special Period.
Among the announced changes, the decentralization of the authority to approve prices and tariffs stands out, as it will be transferred to companies and territorial administrations.
Moreover, the traditional method of pricing based solely on costs is being eliminated. Instead, the authorities intend to use market references and the position of each product within the value chain.
The shift represents an implicit admission of the failure of decades of state interventionism and, particularly, of the price controls implemented in recent years in an effort to contain inflation, which continues to heavily impact the Cuban population.
On Wednesday, Miguel Díaz-Canel publicly acknowledged what independent economists and experts had been warning about for years: price controls did not curb inflation and, on the contrary, contributed to shortages, the expansion of the black market, and the rising costs of numerous products.
«Price controls have practically failed to contain inflation. Many times they led to the disappearance of products, shifts towards illegal markets, higher prices, and decreased tax revenue,” admitted the leader during the Extraordinary Plenary of the Central Committee of the Communist Party.
This is an unusual self-criticism in a political system that for years attributed the economic decline almost exclusively to U.S. sanctions, while dismissing warnings about the negative effects of state regulations.
The recognition comes after multiple unsuccessful attempts to administratively control prices.
One of the most notable examples was Resolution 225 of 2024, which established maximum prices for essential products such as chicken, oil, powdered milk, and detergent.
The measure ended up being partially suspended even before it came into effect due to the tensions generated with importers and private traders.
At that time, experts warned that the initiative would worsen the shortage and stimulate informal markets. Two years later, the Government itself has come to acknowledge these effects.
The reform announced by Marrero also reflects how far the economic crisis has forced the regime to accept market mechanisms that for decades were considered incompatible with socialist orthodoxy.
The use of market reference prices as a criterion for setting rates represents a significant departure from the principles that have guided centralized planning since 1959.
However, the change comes in an extremely delicate context. Inflation remains sky-high, wages continue to lose purchasing power, and the accelerated depreciation of the Cuban peso has driven the dollar to record rates in the informal market.
Although authorities assure that the partial liberalization of prices will be accompanied by new social protection policies, doubts remain about the State's financial capacity to offset the impact these measures may have on an increasingly impoverished population.
Beyond the announcements, the reform represents one of the most significant economic adjustments made by the Cuban government in recent years and signifies the official acknowledgment that one of its most emblematic tools for intervening in the economy has ended up worsening many of the problems it sought to resolve.
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