Cuban economy shrank 11% in 2020, government says

HAVANA, Dec 17 (Reuters) - Cuba’s already cash-strapped economy shrank 11% in 2020 due to the pandemic, tougher U.S. sanctions and domestic inefficiencies, Economy Minister Alejandro Gil said on Thursday, forecasting 6% to 7% growth for next year.

Addressing a year-end session of the Communist-run country’s parliament, Gil said it would take the next two years for the state-run economy to recover from this year’s sharp contraction.

The government estimate was even more dire than that of the United Nations Economic Commission for Latin America and the Caribbean which this week predicted an 8.5% contraction for Cuba this year, compared to a 7.7% regional decline.

“This year, we received just 55% of the hard currency we had planned,” said Gil, who did not provide data on the debt, trade or current account.

Earlier this week, he told a parliament commission that imports were down 30% compared to last year.

Cuba imports more than 50% of its fuel, food and many other vital inputs and this decline, coming on top of a 15% drop in 2019, has resulted in a scarcity and long lines for even the most basic products, from food and medicine to fuel.

Gil said a gradual recovery would begin in 2021 based mainly on a 50% increase in tourism to 2.2 million arrivals in 2021, compared with more than 4 million in 2019 and a devaluation of the peso and restructuring of the economy that would create better conditions for growth. (Reporting by Marc Frank; Editing by Bernadette Baum)