In the midst of the current economic crisis and price speculation, the Cuban government announced that it will cap prices on state purchases from Cuban small and medium-sized businesses, the MSMEs, by decree. Will this curb speculation and abusive prices?
The Ministry of Finance and Prices announced on Thursday that the Cuban government would limit profits on state purchases from MSMEs: is this part of the strategy to correct the economy?
According to Resolution No. 209, published in Official Gazette No. 57 on June 25, state-owned enterprises in Cuba will not be able to earn more than 30% profit on their purchases from MSMEs.
This measure is part of the package of economic reforms announced by the authorities at the end of 2023, officially called “Government projections to correct distortions and boost the economy”, according to the government. But will these new measures really benefit consumers?
Its main objective is to try to contain state spending and contribute to controlling inflation, which has been increasing in recent years, according to them. It will be imposed from next Monday, July 1.
Cuba caps prices for SMEs
In addition to Cuba capping prices for MSMEs, which is further detailed in the resolution. In general, starting in July, state-owned companies will not be able to pay more than 30% of profit to MSMEs for the goods and services they purchase from them.
This limit would also apply to the total costs and expenses of MSMEs, including taxes. In addition, provincial and municipal councils will be able to establish maximum prices for some specific products, taking into account the characteristics of each territory.
The Cuban government’s goal in capping prices for MSMEs is to strengthen price control measures and thus limit profits on state purchases.
Cuban authorities have implemented a campaign to reduce inflation through price controls and sanctions on private companies. However, this strategy does not address the root causes of the problem, which lie in the structural economic crisis facing the country. We will see if this decree improves the problem of prices.
Subscribe to notifications
