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Cuba’s inflation rate expected to exceed 70% in 2021

Cuba’s inflation rate expected to exceed 70% in 2021

Economic hardship is seen every day on labels in Cuba. The rise in consumer prices will indeed reach 70% in 2021, Economy Minister Alejandro Gil announced on Tuesday, presenting his report to parliament.

“We are obviously going to end with an inflation rate above 70%,” said the minister, explaining that much of the increase was due to the fact that the government has increased prices by 44% since January in as part of a monetary reform. This has also resulted in a very sharp increase in wages. The minimum wage was set in January at 2,100 pesos per month ($ 87) and by the end of the year the average monthly wage will rise to 3,934 pesos (about $ 163).

An increase in GDP below forecasts

The minister considered that inflation was due to external factors: the Covid-19 pandemic and the strengthening of the American economic embargo against Cuba under the presidency of Donald Trump, on which Joe Biden did not go back . Alejandro Gil recalled that a growth of 4% of the GDP was expected for 2022, with a gradual recovery of the economy, starting with the tourism industry, the economic engine of the island.

This year, GDP grew by 2%, much less than the 6% expected by the authorities at the start of the year. And this in particular because of the “strengthening of the blockade”, said the minister, who however admitted that several aspects of the reform had to be corrected. The effects of this reform were one of the factors that sparked the historic protests of July 11, when people took to the streets shouting “We are hungry! “And” Freedom! »In about fifty Cuban cities.

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