Inflation in Cuba soars to as much as 500%

From our Bureau of Woeful Statistics

Since Cuba has two kinds of markets — one formal and one informal (black market) — calculating inflation rates is tricky. The latest estimates put the inflation rate in the government-controlled formal market at 31.24%, and as much as 500% in the informal market. Since goods available in the formal market are extremely scarce, many Cubans have to rely on foreign-currency stores and on the informal market.

Meanwhile, salaries remain stagnant, and exchange rates for dollars and euros –which are needed to buy scarce goods — continue to make the peso ever more worthless. What all of this means is that life in Castrogonia became more intolerable than ever in 2023. And all signs point to a worsening of scarcity and inflation in 2024. Vamos bien!

Loosely translated from Diario de Cuba

Cuba closed 2023 with an interannual inflation of 31.34% in its formal market, compared to the 39.07% registered in the previous year, mainly due to increases in restaurants, transportation and food, the National Office reported this Thursday. of Statistics and Information (ONEI).

This organization does not reflect the evolution of prices in the majority and best-stocked informal market on the Island, which is most affected by inflation due to its absolute lack of regulation and the strong shortage of basic products in the formal market, EFE reported. Therefore, the real inflation rates on the Island could be much higher.

The consumer price index (CPI) increased by 3.39% compared to the previous month, the ONEI said.

By category, the year-on-year increase in restaurants and hotels (47.18%) stood out, followed by transportation (37.52%) and food and non-alcoholic beverages (36.36%), traditionally the most inflationary.

All categories experienced year-on-year increases, many with double-digit rates, except alcoholic beverages and tobacco, which fell by 17.85%. The least inflationary were health (1.04%) and communications (0.50%), sectors controlled by state monopolies.

This strong increase in prices follows that registered in 2021, when the ONEI estimated inflation at 77.33%, and the 39.07% rebound in the Cuban formal market in 2022. There are no alternative CPI measurements to the official one in Cuba .

There is also no reliable data on the evolution of the Cuban informal market, where some prices of basic products are highly volatile and have even doubled in the last 12 months. Some independent estimates placed informal market inflation in 2021 at around 500%.