Cuban Economy Minister Details Dire Austerity Measures

Cuban Economy Minister Details Dire Austerity Measures

Cuba is drastically cutting electricity, imports and investment, as well as reducing fuel consumption by 28 percent through the end of the year, its economy minister said on Friday in a closed-door speech to the National Assembly published by official media on Saturday.

The measures are sure to put the import-dependent economy into negative territory, despite a tourism boom in the wake of a growing detente with the United States. They also represent a huge setback for a country struggling to reform an already decapitalized and often dysfunctional system.

Cuba's economy grew just 1 percent in the first half of this year after expanding 4 percent in 2015, according to the government, which says it imports 17 cents of inputs, such as raw materials, for every $1.00 equivalent of economic activity.

"We planned to import $14.416 billion to support 2 percent growth this year, but with the adjustments we will spend $11.973 billion," Economy Minister Marino Murillo said, a reduction of nearly $2.5 billion, or 15 percent.

President Raul Castro said on Friday that lower commodities prices were battering Cuban exports of nickel, refined oil products and sugar, while revenue from the sale of professional services to oil-producing countries such as Venezuela and Angola had suffered.

Castro, also speaking to the National Assembly, said the economic crisis in Venezuela was affecting its oil supply to Cuba, with Venezuela's shipments of crude oil and refined products to Cuba down 20 percent this year according to a Reuters report on Friday.

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