Cuba Announces Austerity Measures to Curb Deficit and Inflation, Sparking Anxiety Over Higher Prices and Shortages
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Cuba announced austerity measures including price hikes on basic services and goods like electricity, transportation, and food. This caused anxiety among Cubans already struggling with high inflation.
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The measures aim to curb Cuba's deficit and inflation, currently around 30%. They include eliminating some tax exemptions and increasing taxes on private businesses.
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Prices for goods and services are expected to rise, impacting purchasing power. Economists expect higher inflation in coming months.
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The fragile economy was hit hard by US sanctions and pandemic disruptions to tourism, a top revenue source. Shortages of imported essentials like fuel and medicine persist.
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Some economists say the belt-tightening is necessary, but Cuba should also take steps to incentivize economic growth and diversification. There are worries about further migration amid the economic crisis.