Adjusted for skyrocketing inflation, the real average monthly salary in Cuba is less than $2

After 65 years of socialism, the only things Cubans have gained are food and fuel shortages, crumbling buildings and infrastructure, brutal repression, and an average salary of less than $2.

Via CubaNet (my translation):

The ‘real’ average salary in Cuba is less than two dollars, experts say

Cuba’s National Office of Statistics and Information (ONEI) reported that the average state salary in 2023 was 4,648 Cuban pesos, but this figure does not account for the growing inflation in the country.

As economist Pedro Monreal argues, this ONEI figure is not adjusted for the increase in prices in the current inflationary context. Calculating the salary based on the official year-on-year inflation, the “real” average salary in 2023 would be 1,435 pesos.

That amount would be 20% higher than the salary in 2020, calculated from the official inflation (1,194 CUP), but using data from the Economist Intelligence Unit (EIU), the average salary in 2023 would be approximately half of that amount.

According to the EIU, the “real” average salary, taking into account their price data analysis, only reaches 645 Cuban pesos. This would be equivalent to $1.72, considering that in the informal currency exchange market the US dollar is at 375 this Tuesday, April 30th.

“The ONEI’s practice of publishing nominal data makes them relatively irrelevant for economic analysis in an inflationary environment like Cuba’s. Furthermore, not a few economists consider that the official data undervalues national inflation,” Monreal wrote in his analysis.

The year-on-year inflation in the formal market, according to ONEI, was established at 31.34% at the close of December 2023 and at 33.17% at the end of March, a value that does not account for the increase in prices in the informal currency market.

Without taking inflation into account, the average salary data offered by the Government indicates that the highest monthly incomes are in Havana and the lowest in Granma and Santiago de Cuba. In the capital, the average income was 5,354 pesos; in Granma, 3,931; in Santiago de Cuba, 3,961; and in Las Tunas, 4,031 pesos.

In a breakdown by sectors, jobs in mining and quarrying showed the highest salary increase (approximately 7,000) but healthcare and education workers had an average salary of 4,222 pesos and 3,932, respectively.

The value of the dollar continues to increase in Cuba’s informal market, reaching a record figure amid the economic crisis facing the island.

The increase in the value of reference currencies is simply the result of the balance between supply and demand, since Cuban pesos are not required for some daily life operations, including the purchase of gasoline or products in stores that operate in freely convertible currency (MLC).

With the current situation, how much will 1.72 dollars be worth?

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