Cuban economy grew 12.5% in first half of year

Campaign News | Wednesday, 13 September 2006

Surge in construction and services behind boom

Cuba's economy grew 12.5 percent in the first half of 2006, boosted by a surge in the construction, transport and services industries, Economy and Planning Minister Jose Luis Rodriguez said.

This year the economy is likely to attain a second straight year of growth exceeding 10 percent as local investment and proceeds from exports such as nickel and sugar cane boost government coffers and workers' incomes, Rodriguez said at a press conference in Havana.

``We are moving forward in our policies of favoring workers' income, keeping unemployment at low levels and investing in our future ability to generate electricity at lower costs," Rodriguez says.

The economy, ruled by communist leader Fidel Castro since 1959, is benefiting from inflows of investment from countries such as France, Spain and Canada. It is too early to asses the effect of increased investment from Venezuela, which is helping the country to renew its oil refining and electricity generating capacity, Rodriguez said.

Cuba is considering expanding output of ethanol fuel in a joint venture with a Spanish company, as international prices for the fuel are ``attractive," he said.

Cuba plans one day to merge its local currency and its convertible currencies into one, as China did, Rodriguez said. He declined to give a timetable.

Cuba has two currencies, the national Cuban peso, which is the currency with which citizens pay for goods and services locally, and the convertible peso, used for transactions with foreigners. One convertible peso is equivalent to 24 national Cuban pesos, 80 U.S. cents, 1.13 euro and 1.3 British pound.

The Cuban government last year revalued both currencies by 7 percent against the dollar because of a surge in foreign investment inflows and proceeds from sales abroad of nickel, sugar and medical and educational services to countries such as Venezuela and Guatemala.

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