Cuba

The Cuban government said Friday it will have to either increase prices for fuel and electricity, or reduce rations for basic supplies, the Associated Press reported. President Miguel Díaz-Canel said that such difficult measures were needed for difficult times, after the minister of the economy said Cuba’s economy contracted between 1% and 2% this year, and inflation ran at about 30%. There were problems in the tourism industry — Cuba's main source of income — and in farm production. “This is a question of complicated measures, as complicated as are these times," Díaz-Canel said.

Newly licensed private businesses are becoming a lifeline for Cuba, bringing in about half of the country’s total food imports as the cash-strapped Communist government struggles to keep power plants running and provide public transport because of acute fuel shortages, the Wall Street Journal reported. Havana passed laws allowing Cubans to form small businesses that can employ up to 100 people in the wake of countrywide protests that shook the impoverished island two years ago. Since then, more than 8,000 small and midsize businesses have registered with the government.

The Biden administration is preparing to unveil new regulatory measures to allow more U.S. financial support for small private businesses in Cuba, Reuters reported. The move, expected as soon as this week, is seen as a long-promised but limited step to ease restrictions to help Cuba's budding entrepreneurs cope with fallout from the Communist-ruled island's crippled economy. The announcement is aimed at making it easier for Americans to directly assist Cuban small business owners by providing guidelines for loans to them through the U.S. financial system.

The Cuban Central Bank issued rules this week banning state and private businesses from using ATMs and limiting cash transactions between them, as it seeks to tame runaway inflation and off-the-books business amid a grave economic crisis, Reuters reported. The regulations went into effect on Thursday. They limit cash transactions to 5000 pesos and will be implemented gradually over six months, official media said. The government pegs the dollar at 24 pesos and for select companies, tourists and residents at 120 pesos, though it has few to exchange.

Crisis-hit Cuba on Monday forecast economic growth of 3% for 2023 and reported 2% in 2022, half of what it had previously predicted and down 8% from the pre-pandemic level, Reuters reported. This year has proved tough for most Cubans, who had already suffered as a result of two years of pandemic lockdowns, raging inflation and food, medicine and other shortages. Daily blackouts have disrupted lives and the economy, while fuel and parts shortages have gutted public transportation.

China has agreed to restructure Cuban debt and provide new trade and investment credits to the beleaguered Caribbean Island nation after a meeting in Peking between the two Communist countries’ leaders, Reuters reported. Cuba Economy Minister Alejandro Gil said the latter had also donated $100 million to help the country cope with basic goods shortages and an energy crisis worsened by Hurricane Ian, which decimated western Pinar del Rio province in late September.

The Cuban central bank issued regulations on Tuesday for virtual asset service providers, after giving a nod last year to the personal use of cryptocurrencies, a move some experts said could help the Communist-run Caribbean island skirt stiff U.S. sanctions, Reuters reported. Cryptocurrencies, which allow financial operations to be carried out anonymously in a decentralized manner, have been used in the past to get around capital controls, as well as to make payments and transfers more efficient.

Cuba is struggling to cover a fuel deficit as imports from Venezuela and other countries remain below historical levels and global prices boosted by Russia's invasion of Ukraine make purchases almost unaffordable, according to analysts and data, Reuters reported. The Caribbean country, which is dependent on fuel imports mostly from political ally Venezuela to cover more than half of its demand, is since last month dealing with diesel and gasoline shortages leading to long lines in front of stations.

Thousands of small and medium-sized Cuban businesses will be allowed to incorporate in the coming months, in one of the most important economic reforms taken by the island's Communist government since it nationalized all enterprises in the 1960s, Reuters reported. The reform, details of which came to light this week, will permit small and medium-sized businesses for the first time since 1968, putting an end to the legal limbo in which many have existed for years in the Soviet-style economy.