Cuban economy grows 4 per cent in year of detente with US

HAVANA (Reuters) – Cuban gross domestic product grew 4 percent in 2015, official media reported yesterday, as internal reforms overshadowed negative trends such as falling commodity prices.

The report did not refer to warming relations with the United States, instead mentioning that growth came despite continued sanctions.

Growth was in line with projections made a year ago, and Economy and Planning Minister Marino Murillo attributed it to improved planning and contracting with “all productive sectors growing compared with last year.”

Murillo was speaking at a closed session of the Council of Ministers and the report focused on internal economic performance in the productive sectors, not services and external finances.

Despite market-oriented reforms begun five years ago, the Cuban economy grew an anaemic 1 per cent last year and, on average, 2.3 per cent each year from 2011 through 2014.

The government says it needs up to 7 per cent growth to attain significant development.

The report cited a fall in the prices of imports such as fuel and food, which helped growth, but did not allude to similar steep declines in the prices of key exports such as refined oil products, nickel and sugar.

The United States maintains a trade embargo on Cuba despite President Barack Obama’s policy change toward normalizing relations a year ago. The report did not mention sectors that have most benefited from better US relations, such as tourism and related services and remittances.

The report also failed to mention Cuba’s most important foreign currency earner, the export of professional services to oil-producing nations, such as ally Venezuela. Those services accounted for more than $8 billion in revenue out of $18 billion last year.

Cuba receives more than 100,000 barrels of oil per day as part of an exchange for Cuban doctors and other professionals. Under terms of the deal, Vene-zuela is protected from falling oil prices, which in turn punish Cuba.

Venezuela’s economy is among the worst performing in the world as the value of its oil exports has fallen as much as 60 percent over the last 18 months.

Around the Web