At the National Assembly of the People’s Power (ANPP, in Spanish), Gil explained that until November, inflation rates amounted to 69.5 percent, almost 10 points higher than what was expected at the beginning of the year (60), which clearly shows in the decrease of people’s puchasing power.
The prediction is that the year will end with over 70-percent rates, the minister said, but clarified that this is not the result of the monetary overhaul process undertaken in early 2021, when a single currency was approved and the exchange rate against the dollar was set at 24 pesos per dollar, besides a salary and price reform.
The inflation in Cuba, as well as in the rest of the world, is the result of a combination of factors, the minister commented, such as the slowdown in production due to Covid-19 and the injection of stimulus packages.
In this regard, he recalled that Cuba also injected 2 billion pesos (nearly 83,330,000 dollars) into the economy without productive backing, as part of protection measures for workers, artists and other people during the pandemic.
The increase in demand without productive backing and with money in circulation generates inflation, the minister summed up, and spoke about the burden on all countries posed by the breakup of logistic chains, because imported products and raw materials for production do not arrive, which has a negative impact on offers.
Within that context, Cuba is facing an unusual situation: the tightening of the US economic blockade, with a cost of over 9 billion dollars from April 2019 to December 2020, plus over 3 billion dollars in income less in this period.