14ymedio, Madrid, 14 December 2023 — The increase in the fiscal deficit of 2023 by 44.4%, announced this Wednesday by the Cuban Government, arouses unfavorable comments from several independent economists, who regret the lack of a plan to fight against an inflation of 27% so far this year. According to the decree that modifies the State Budget, the deficit will reach 98 billion pesos instead of the 68,000 expected (4,083 and 2,833 million dollars, respectively, at the official exchange rate).
The public debt contracted for this year is set at just over 151 million pesos, around 6,296 million dollars, again taking into account the official change. This figure is, as explained by the Minister of Finance and Prices, Vladimir Regueiro, the sum of the deficit, the amortizations of debts that were due in 2023 and the “activation of letters of budgetary guarantees and other securities issued as a result of the monetary and financial order that corresponds to that year.”
“Although there are still no estimates of the 2023 Gross Domestic Product,” said economist Pedro Monreal in his X account, “it is likely that Cuba’s fiscal deficit would be close to 15% of GDP, which is terrible news and would confirm the persistence of an inflationary macroeconomic environment.”
The expert uses the figures of the last Statistical Yearbook of Cuba, which placed the national GDP at current prices in 2022 at 633,442 million pesos (26,393 million dollars). With those figures, the fiscal deficit would be 15.4%, although the Government contemplated a GDP growth for this year of 3%, which seems impossible to meet.
Monreal was aware of the decree’s content since the official press reported that this was one of the topics discussed in the Council of Ministers, since, he warned, it was clear evidence that the planned goal was not going to be achieved.
“The biggest deficit has been explained by resource limitations and effects on income raising, something that is usually the result of weaker economic growth than initially estimated. CEPAL (Economic Commission for Latin America and the Caribbean) predicted a growth of 1.8%, lower than in 2022 (2%),” Monreal stated.
The economist and professor at the Javeriana University of Cali (Colombia), Pavel Vidal, published an article aimed at analyzing the situation on the occasion of the announcement of the modification of the deficit. “Today it would be necessary to lower the fiscal deficit from 11 to 3% of
