Transcript Cuba at a glance

El Caribe
2015– Serie: Economía de América Latina
Cuba
Cuba at a glance:
OVERVIEW
A change of leadership within the forecast period is highly likely.
Although the Economist Intelligence Unit expects the transfer of power
to be relatively smooth, there is no obvious candidate for the
presidency among the younger generation of politicians. Systemic
changes to the tightly controlled political system are unlikely. The
economic reform process will remain uneven and some vital
measures (such as improving credit provision) will lag, but we
nevertheless expect an expanded scope for private enterprise and
foreign investment. We have revised down our 2013 growth forecast
to 3%. However, growth is expected to pick up to around 4-5%
annually in 2015-16. Following moves to increase usage of the
"unofficial" (but legal) exchange rate in late 2010, the process of
closing the gap with the official rate is forecast to begin in 2015, as
part of a strategy to unify the two currencies. After registering a small
estimated surplus (of 0.5% of GDP) in 2011, we expect the current
account to remain in surplus in 2015-16, as the authorities focus on
building reserves in order to prepare for eventual exchange-rate
unification.
Source: Economist Intelligence Unit
Cuba's business environment score will improve marginally, in
line with a gradual liberalization of the island's state-dominated
economy. However, Cuba will continue to lag at the bottom of the
index rankings (78th out of 82 countries ranked), as room for
domestic private business and foreign business involvement will
remain heavily constrained. We anticipate that an adjustment of
the unofficial exchange rate to bring it into closer alignment with
the official rate will begin to reduce economic distortions, but
imbalances resulting from the fixing of many prices below their
market level and the persistence of the dual exchange-rate
system will remain, continuing to deter investment.
Source: Economist Intelligence Unit