Country Forecast Cuba September 2015 Updater

Country Forecast Cuba September 2015 Updater



  • The 84-year-old president, Raúl Castro, will retire in 2018 (the end of his current term) at the latest. His priority will be to ensure a smooth transition to a younger generation of political leaders, as well as strengthening the political system and the economy in readiness for the handover. The Economist Intelligence Unit expects some adjustments in the power structure and decentralisation of authority as the old guard is replaced by a new generation of leaders. However, we do not anticipate any sudden, radical transformation of the political system.
  • We expect gradual normalisation in relations with the US over the next five years, with a complete lifting of US sanctions likely by the end of the 2015-19 forecast period (we expect this to occur in 2018). A shift in US public opinion in favour of rapprochement, as well as Cuban economic reforms and a surge in Cuban engagement with third-country businesses, will erode the influence of the hitherto powerful US pro-sanctions lobby.
  • Cuba's population will decline slightly and age rapidly, reflecting low birth and death rates, and a rise in net emigration. As public-sector jobs are shed, non-state employment will grow, keeping the official unemployment rate below 5%.
  • There is huge scope for catch-up in terms of economic efficiency and development of new private-sector activities, particularly in the services sector. After a slowdown in 2014, we forecast much stronger GDP growth rates in 2015-19, spurred by economic reforms and the normalisation of relations with the US. This will bring much stronger investment and export growth.
  • The process of removing the dual exchange-rate system has begun, but no date or details have been given for the biggest step: the elimination of the convertible peso (CUC), which has been repeatedly delayed. When this happens-which we expect in 2017-unification and a revaluation of the unofficial "Cadeca" rate will improve efficiency.
  • Economic vulnerability to commodity price shocks, and to disruptions in trade and financing relations with Venezuela will diminish as access to international finance improves.
  • The greatest uncertainty in the long term concerns the future of the one-party political system. Our central forecast assumes that the government will muster enough support and introduce sufficient reforms to avert overthrow or collapse.


Country Forecast Cuba September 2015 Updater
Country forecast overview: Highlights
Country forecast overview: Key indicators
Country forecast overview: Business environment rankings
Country forecast overview: Cuba's business environment at a glance
Fact sheet
Outlook for 2015-19: Political stability
Outlook for 2015-19: Election watch
Outlook for 2015-19: International relations
Outlook for 2015-19: Policy trends
Outlook for 2015-19: Fiscal policy
Outlook for 2015-19: Monetary policy
Outlook for 2015-19: Economic growth
Outlook for 2015-19: Inflation
Outlook for 2015-19: Exchange rates
Outlook for 2015-19: External sector
Data summary: Global outlook
Data summary: Gross domestic product, current market prices
Data summary: Gross domestic product, at constant prices
Data summary: Gross domestic product by sector of origin
Data summary: Growth and productivity
Data summary: Economic structure, income and market size
Data summary: Fiscal indicators
Data summary: Monetary indicators
Data summary: Employment, wages and prices
Data summary: Current account and terms of trade
Data summary: Foreign direct investment
Data summary: External debt
Data sources and definitions

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