The Cuban economy:

Current performance and future trends:

focus on external trade

Presentation by Emily Morris, Economist Intelligence Unit, at

National Summit on Cuba, Mobile, Alabama, June 10th 2005
 Current performance and future
prospects: summary of EIU forecast
2005 performance: Prospects 2006-07:
• GDP up by 4.2% • GDP up by average
4.3%
• Exports up by 7% • Exports up by average
6%
• Imports up by 13% • Imports up by average
8%
Strengthening economic performance linked
to import capacity

40
30
20 Increase in import
Annual % change

spending
10
0
1993

1994

1999

2000

2003
1990

1991

1992

1995

1996

1997

1998

2001

2002

2004

2005
-10
-20
Increase in GDP
-30
-40
-50
 Performance:
import spending
10,000
9,000
8,000
7,000
6,000
US$ m

5,000
4,000
3,000
2,000
1,000
0
1990

1993

1994

1995

1997

2000

2005
1991

1992

1996

1998

1999

2001

2002

2003

2004
 Import capacity components:
where the foreign exchange comes from
10,000
Net capital and factor services
9,000 flows

8,000 Net current transfers

7,000 Other services

6,000
US$ m

Tourism
5,000
4,000 Other goods exports

3,000
Nickel
2,000
1,000 Sugar

0
1991

1992

1994

1995

1996

1997

2000

2001

2003

2004
1990

1993

1998

1999

2002

2005
 Performance:
• Strong increase in import capacity
• The composition of import capacity has
become more diverse
• BUT
– still a high degree of dependence on nickel,
tourism
– heavy dependence on a few strategic trade and
finance partners
 Prospects?
• Expansion of export earnings will be slower: increase of around
US$1bn in three years
• some recovery in sugar output
• higher nickel output but weaker prices
• Expansion of other goods export sectors
• continued tourism expansion but lower rate of growth
• expansion of other services exports
• Little growth of remittance flows
• New capital inflows from China and Venezuela increase
capacity and improve infrastructure
• Higher level of international reserves reduce risk to exporters
 Prospects for US business?
• Expansion of imports => larger market
• But
– threatened by Cuba’s closer ties with China,
Venezuela and other Latin America

(Assuming no change in Cuban government or US policy)

emilymorris@eiu.com