Cuba reports strong growth for fourth year
Campaign News | Friday, 28 December 2007
By Marc Frank, Reuters
Cuba said on Friday its economy grew 7.5 percent in 2007, the fourth year the Communist-run country has reported a big increase in the gross domestic product since being plunged into crisis by the Soviet Union's demise.
Economy and Planning Minister Jose Luis Rodriguez told a year-end session of parliament a 10 percent target was not reached due to the heaviest rains since the early 1960s, import delays and other factors.
Rodriguez said Cuba's GDP would increase 8 percent in 2008.
"The results are significant and above the 5.4 percent norm for the region ... and at the same time demonstrate the gradual consolidation of the economy," Rodriguez said.
Rodriguez reported a 24.7 percent rebound in the agricultural sector, 7.8 percent in industrial activity, 7.9 percent in transportation and 11.7 percent in services.
Growth was reported as 12.5 percent in 2006, 11.8 percent in 2005 and 5 percent in 2004, based on a unique Cuban formula that outside experts such as the Economist Intelligence Unit and the CIA say may overstate the GDP by 3-4 percentage points.
Cuba's GDP plunged 35 percent in the early 1990s and industrial activity 80 percent with the demise of former benefactor the Soviet Union, leaving the country in darkness, crippling public transportation and causing food and other shortages.
A gradual recovery has gained force since 2004 as oil-rich ally Venezuela began payments for massive social service assistance and soft credits from China resulted in billions of dollars in new revenues to restore infrastructure and improve Cubans' often difficult daily lives.
IMPROVED TRADE BALANCE
Rodriguez said exports increased 24 percent and imports just 2 percent this year, a marked turnaround from recent years when imports soared to twice the 2004 level and exports stagnated.
Foreign trade totaled $12.18 billion in 2006, with exports of $2.76 billion and imports of $9.42 billion, the government reported.
The trade deficit was offset by more than $6 billion in revenues from services in 2006, with similar revenues expected for 2007, although Rodriguez did not mention a figure.
"We have a commercial balance of goods which is better than previous years," Foreign Trade Minister Raul de la Nuez recently told Reuters.
"Nickel prices are the most important reason our exports are up, followed by pharmaceuticals and medical equipment and tobacco," de la Nuez said.
"We have been importing a great deal of equipment and products that did not have to be repeated this year and we are pursuing a policy of substituting imports," de la Nuez said when asked about the slowdown in imports.
Cuba's current account balance of payments was $240 million in deficit last year, compared with a surplus of $140 million in 2005, and foreign debt rose by $2 billion to around $16 billion, the government said.
The current account balance of payments is considered the broadest measure of any country's external transactions. It includes trade, services like tourism, and financial transfers like profit repatriation and interest payments.
Rodriguez made no mention of this year's balance of payments or foreign debt, reported as $16 billion in 2006 by the government.