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Cuba Sees Tips of Healing, Reveals ‘Adventurous’ Procedures to Tame Inflation|Investing News

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May 14, 2022
tagreuters.com2022newsml LYNXNPEI4D09I12022 05 14T193109Z 1 LYNXNPEI4D09I RTROPTP 3 CUBA TOURISM

By Dave Sherwood and Nelson Acosta

HAVANA (Reuters) – Cuba ´ s ailing economy has actually started to recuperate in some sectors after 2 years of pandemic-induced contraction however skyrocketing international costs for food and fuel need “adventurous” steps to tame inflation, economy minister Alejandro Gil informed Cuban legislators on Saturday.

Gil stated Cuba saw a 38% boost in exports in the very first quarter, improved by the increasing cost of nickel, a leading mineral export. He stated inflation had actually likewise slowed regardless of upward pressure on the cost of imports.

” We are starting to see a clear and steady healing,” Gil stated.

However the cost Cuba spent for imported products leapt by almost $700 million in the very first quarter, outmatching the nation ´ s modest gains in exports, a dilemma Gil credited to “imported inflation” driven by fast-rising costs for such items as fuel, corn for feeding animals and wheat.

U.S. sanctions and skyrocketing food and fuel costs, in part due to the Russian intrusion of Ukraine, have actually put Cuba ´ s warm healing at danger and threaten to aggravate scarcities currently requiring residents to line up for food, medication and other standard products. {nL2N2W20F1}

Tourist, a leading source of the forex essential to spend for more expensive imports, has actually likewise lagged well behind federal government targets, making complex healing.

Gil did not offer figures for general gdp nor did he attend to how first-quarter outcomes added to satisfying the federal government ´ s target of 4% development in 2022.

A significant sticking point, Gil stated, continues to be Cuba ´ s informal currency exchange rate, which has actually swollen to 5 times the federal government rate of 24-1 in current months, slashing purchasing power for the typical Cuban.

To fight this, Gil stated Cuba will start offering foreign currency at a rate in between the authorities and black market rates, however limitation those offers to specific state-run and personal services in a quote to improve output of high-demand items.

The economy minister stated the more beneficial exchange would underpin “production that will later on be offered to the population in nationwide currency.”

Gil stated residents looking for to trade pesos for dollars would not have the ability to participate in the brand-new exchange program, however that the cash-strapped federal government was pursuing that objective.

” These are strong, ingenious steps. There are no magic … services that can resolve all the issues at the same time,” Gil stated.

( Reporting by Dave Sherwood and Nelson Acosta; Modifying by Mark Porter)

Copyright 2022 Thomson Reuters

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