Cuba's 'War Economy': Government Fights Inflation, Budget Deficit

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Cuba's government has announced increased price controls and a crackdown on tax evasion, Reuters reported. It is an attempt to control high inflation and a budget deficit as part of what the government calls a “war economy.”

– We are all here to save the (Cuban – ed.) revolution and save socialism – said President Miguel Diaz-Canel during Sunday's government session in Havana, quoted by the Granma daily, the official press organ of the Central Committee of the Communist Party. Cuba.

“Cuba's economic crisis is the result of a combination of factors, including the effects of the Covid-19 pandemic, tightening sanctions imposed by the US and a model based on state domination, in which activity is hampered by bureaucracy, bad governance and corruption,” Reuters said.

The social and economic situation in the Caribbean country is now considered to be the worst since the revolution led by Fidel Castro in the 1950s. In the last two years A record number of people have fled Cuba. Life and economic activity on the island is further complicated by electricity shortages.

Cuba's “War Economy”

The measures announced by the government in Havana aim to correct macroeconomic imbalances, increase the inflow of foreign currencies and stimulate domestic production, with particular emphasis on food production, explained First Deputy Minister of Economy and Planning Mildrey Granadillo de la Torre.

The official Cuban media coverage of the cabinet meeting described a difficult economic situation but did not provide specific figures or say when the announced measures would be implemented.

Cuban authorities abolished in 2021 ban on the operation of private companies, which has been in force since Castro's revolution. Communist Party supporters, however, claim that price disparities have contributed to the sharp increase Inflation.

Main image source: Shutterstock



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