Cuban Gov. Admits Inability to Reverse Economic Collapse
Official data confirms an 11% drop in Cuba’s Gross Domestic Product (GDP) over the past five years.
HAVANA TIMES – The Cuban economy is in a deep slump. This was made clear on Monday by Economy Minister Joaquin Alonso during a session of Parliament’s Economic Commission, held in the presence of President Miguel Diaz-Canel and National Assembly President Esteban Lazo. In his report, the Minister of the Economy revealed that Gross Domestic Product (GDP) has fallen by 11% over the past five years, although the actual figure may be even higher than what official statistics show. The session was marked by a somber tone, a lack of solutions, and the implicit recognition of a country amid economic collapse.
The most striking figure was the 1.1% contraction in GDP in 2024, compared to the modest 2% growth that had been projected. But most alarming is that since 2019, the national economy has lost more than a tenth of its size. According to the minister, primary production — which includes agriculture, livestock, and mining — has been hit the hardest, with a 53% drop. Manufacturing has declined by 23%, and social and non-social services by 6%.
This downturn is compounded by a challenging external environment, marked by limited access to fuel, rising international prices, and the paralysis of key imports due to a lack of foreign currency. However, the greatest obstacles remain internal: structural distortions, a ballooning external debt, inefficient state enterprises, and a crumbling energy system.
Minister Alonso’s report revealed that Cuban exports in the first half of 2025 reached only 62% of the target, falling well short of the already disastrous 78% achieved during the same period the previous year. The country is struggling to sell products such as nickel, honey, charcoal, and shrimp on the international market. The biopharmaceutical industry has also seen setbacks. Although items like tobacco, lobster, and seafood experienced some recovery, it wasn’t enough to offset the negative balance.
In terms of tourism — another strategic sector — the figures are particularly grim. By the end of the first half of the year, Cuba had received 1.6 million visitors, just 71% of the target. Domestic tourism also declined by 5.2%.
During his presentation, Minister Alonso explained that the country continues to import more than it exports, widening the trade deficit. Imports covered only 67% of the planned needs, yet spending was 7% higher than the previous year, reflecting the rising cost of goods and international freight.
One of the heaviest burdens on the Cuban economy is its massive external debt, which — as the minister admitted — continues to grow and is unsustainable. While the government has managed to renegotiate timelines and restructure commitments, the chronic lack of liquidity and repeated payment defaults have eroded the country’s financial credibility.
The situation is so critical that, according to Diaz-Canel himself, current state revenues “are not enough to acquire essential raw materials to increase national production.” Nor are they sufficient, he added, to “inject foreign currency into a functional exchange market” or to supply stores in the national currency with semi-finished goods. “We try to solve problems by reallocating scarce resources, but that’s no longer enough,” he acknowledged.
In evaluating the state enterprise system, the minister warned that although the number of loss-making companies has decreased, this is not due to improved efficiency but rather a general increase in prices. Private MSMEs — now exceeding 11,000 across the country — account for more than 50% of the national economy but still face bureaucratic obstacles, import restrictions, and increasing tax pressure.
On the subject of remittances — one of Cuba’s key financial lifelines over the past decade — the minister said that growing difficulties exist in channeling them due to restrictions imposed by the USA, but he did not offer any alternatives. Lawmakers called for exploring new ways to capture this flow of money, which in practice sustains millions of Cubans.
There has been no progress in attracting foreign investment either. In the first half of 2025, only 14 new foreign-funded ventures were approved, focusing on areas like hydrocarbon production, wholesale and retail trade, light industry, and finance. None of these projects have yet begun generating substantial income.
Alonso stressed the urgent need to implement measures to stabilize the economy. These include reforming the foreign exchange market, containing the fiscal deficit, and boosting exports through self-financing schemes — 23 of which have already been launched. However, none of these measures appear to have an immediate impact.
The minister also acknowledged the increase in accounts receivable, the persistence of tax evasion, and the lack of productive “linkages,” all of which weigh down any recovery effort. Meanwhile, prices remain high, wages are insufficient, and inflation — though lower than in 2023 — continues to erode purchasing power.
The Cuban regime has been unable to stop the economic freefall and now admits, in increasingly blunt terms, that the current model has reached its limit. But instead of undertaking deep reform, it clings to partial measures, blames external factors, and remains committed to a failed control-based approach. The pessimism in Parliament merely reflects the widespread sentiment on the streets: the Cuban economy is, quite literally, in free fall.
First published in Spanish by 14ymedio and translated and posted in English by Havana Times.