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Cuban economy falters with decline in tourism

Illustration for article titled Cuban economy falters with decline in tourism


Less than a month after reporting disappointing growth numbers, the Cuban economy registered another blow this week when official media reported lackluster foreign tourism numbers. Foreign visitors to the island declined 1.4%, numbering only 181,269 in June, 2,588 less than the same month last year. According to the Latin American Herald Tribune, through the first half of this year, the number increased to 1.66 million, or 3.7%. In spite of that increase, official Cuban daily Juventud Rebelde admitted that the country would likely fall short of its goal of 3 million foreign visitors in 2014.


The Cuba government has conceded that its weak economy is decelerating, and earlier this month downgraded its GDP growth forecast by almost a full percentage point, to 1.4% from an earlier estimate of 2.2%. Cuban GDP grew 2.7 percent in 2013.

The disappointing economic numbers come as the Cuban government implements a variety of economic reforms aimed at decentralizing the economy and attracting foreign investment. A new foreign investment law passed in late June establishes tax exemptions and other concessions for foreign investors, and will allow Cubans living in the United States, Spain, and elsewhere the opportunity to invest in their home country. Investment opportunities, however, will not be extended to 'the terrorist mafia of Miami,' according to comments from Cuban Foreign Trade and Investment Minister Rodrigo Malmierca. Spanish daily El País reports that Cuba needs to bring in €2 billion a year in order to escape its present economic stagnation and underdevelopment.


President Raul Castro reiterated earlier this month that, despite disappointing economic numbers, the economic reform program would continue to be implemented slowly. In a parliamentary address, Castro said, "[this] process, to be successful, must be conducted with the appropriate gradualness and be accompanied by the permanent control of different party and government structures at all levels…" According to Al Jazeera, despite their cautious introduction, Cuba's reforms have legalized home and used car sales and allowed hundreds of thousands of people to open or work in private sector small businesses.

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