With almost a 40% increase in one year, transportation leads inflation in Cuba

With almost a 40% increase in one year, transportation leads inflation in Cuba
With almost a 40% increase in one year, transportation leads inflation in Cuba

Madrid/Inflation advances, unchanged, in Cuba, evidencing the uselessness – or absence – of the alleged macroeconomic stabilization plan that the Government speaks of without there being evidence of its existence. In May, the accumulated figure for the year officially stood at 15.24%, while the American economist Steve Hanke establishes it at 93% since January 1, with an aggravating factor: the expert calculates that the peso has depreciated by 30% so far this year and is the third worst performing currency in the world.

The consumer price index (CPI) data for this May are accompanied by a document in which the National Office of Statistics and Information (Onei) indicates the methodology with which it prepares this data each month. Furthermore, in a general way it explains that it collects prices of 32,175 goods and services in 8,661 establishments located in 18 municipalities on the Island (14 provincial capital cities and four in Havana), revealing that the information has a marked urban bias. 79.1% of the data is obtained in the state sector, 17% in the non-state sector and 3.9% in agricultural markets.

79.1% of the data is obtained in the state sector, 17% in the non-state sector and 3.9% in agricultural markets

In May, the monthly increase in the general CPI accelerated, with 2.69% (compared to 2.13% in April), placing the year-on-year increase at 31.11%, almost the same amount as in May 2023, which In the eyes of Cuban economist Pedro Monreal “it seems to portend another ‘bad’ year in terms of inflation.” Food and non-alcoholic beverages, without being what increases the most, are still the group that contributes the most to the increase in inflation (3.68% more in May and 17.8% so far in 2024). In total, Cubans pay 34.9% more to eat than a year ago.

Last month, the tomato, which at the end of 2023 saw strong increases and had started to contain its price this year, once again bid strongly and increased by 13.8%. It is, however, animal protein that stands out in May. Lard rose by 7.34%, pork by 7.17%, poultry by 4% and ham by 3.16%. On the other hand, the rise in coffee stands out, with 7.31%. Among the foods that fell are, finally, rice (-2.08%), chickpeas (-2.44%), raw sugar (-1.3%) and red beans, barely -0, 86% that in no way cushions so many increases accumulated in recent years.

Regarding the hotels and restaurants division, which also impacts food, the increases in beer (3.09%) continued – which carries the effects of the price increases decreed on alcohol and tobacco –, snacks (2.88%), breakfast (2.84%), ready-to-go foods (2.58%) and lunch (1.55%). Hotels and villas fell (-1.33%), an asset with little impact on the daily life of Cubans and that, for years, Onei had not included in its monthly reports.

The increases continue in transportation, the segment that takes the cake in the year-on-year increase (it costs almost 40% more than in May 2023)

The increases continue in transportation, the segment that takes the cake in the year-on-year increase (it costs almost 40% more than in May 2023) weighed down by fuel price increases. The fifth month of the year grew by 3.79%, driven by the section designated “other type of urban transport” (8.02%), buses (4.57%) and “other type of interurban transport” (3.44%). %). The intercity taxi (2.97%) and, above all, the urban taxi (0.96%) have more content.

By block, the one that rose the most in May (6.02%) was alcoholic beverages and tobacco, which has not stopped its spiral since tariffs were raised in February and has accumulated 33% both year-on-year and in 2024. Meanwhile, the rest include miscellaneous goods and services (2.55%), housing services (2.35%), education (1.71%), furniture and household items (1.13%), clothing and footwear (1.88%), recreation and culture (0.56%), health (0.24%) and communications (0.12%).

The publication of the Onei methodology this month allows us to know some details about how these a priori data, more confusing than the very specific data on food and transportation, are calculated. Thus, we know that housing services include materials for conservation and repair, as well as supplies (water, gas and electricity), that health accounts for the cost of medications, education, expenses in day care centers or goods and services is a large drawer. tailoring that ranges from toiletries to jewelry, umbrellas or watches.

“If the government’s incompetence in its agricultural policy is not resolved, inflation in Cuba will not be substantially reduced”

Communications, for its part, covers internet connection and other telephone expenses, but also equipment, while recreation and leisure includes theater, movie and concert tickets, but also video or music players, games and even pens.

According to Monreal’s conclusions, “after the first five months of the year, official data indicate the collapse of the anti-inflationary component of the 2024 economic package – announced in a fragmented manner and with zigzagging implementation – with a sustained effect of loss of purchasing power.”

The expert adds among his reflections that the year-on-year inflation figures question “the official story that ‘advances’ are being made in macroeconomic stability” and that the increase in the price of animal protein is a direct consequence of the poor management of the field. “If the government’s incompetence in its agricultural policy is not resolved, inflation in Cuba will not be substantially reduced.”

 
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