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Cuban economy meets expectations for first half of 2015

consejo de miniostrosThe country’s Gross Domestic Product grew slightly more than 4% in the first half of 2015, according to a report presented at a June 19 Council of Ministers meeting, by Marino Murillo Jorge, minister of Economy and Planning. The report included an evaluation of the economy’s performance during the first months of the year, and projections for the rest of 2015.

All areas of economic activity showed increases, as compared to last year, with the highest growth rates noted in the sugar industry, manufacturing, construction and retail sales. Projections were not met in transportation, wholesale warehousing and communications.

The trade balance was maintained at a positive level during the first part of the year, Murillo said, although concerns continue to exist in this regard.

He indicated that the presence of some food items in the country’s network of higher priced stores has been unstable, as a result of shortfalls in national production and imports, identifying specifically cheese, chicken and processed meat products. With the objective of resolving this deficit, an additional 40 million dollars is to be allocated for the acquisition of these items.

Also emphasized were problems in freight transportation which negatively impacted the economy. Murillo explained that, through March, 2.1 million dollars had been spent on ship and container overstays, many resulting from problems with railroad and truck transportation of freight to final destinations.

The Minister indicated that these problems were the result of a number of factors including the failure to complete investments planned for 2014 and 2015; a lack of replacement parts and accessories; problems in service workshops; organizational problems; and the low rate of availability of truck and railroad equipment.

The Council therefore agreed to conduct a comprehensive review of the organization and provisioning of freight transport; the repair and maintenance of truck and railcar fleets; and the functioning of port transportation operations.

Murillo recalled that, as has been the case in previous years, the bulk of 2015 investments are scheduled for implementation in the second half of the year, but that a 7.7% shortfall is already being forecast. Murillo indicated that this reflects the need to improve planning, and ensure that required steps are taken during the previous year, so that the first months of the year are not lost waiting for resources.

The Minister stated that projections indicate that the state plan for housing construction will be completed. Some 6,000 dwellings were completed by owners in the first half of the year, and the goal of 17,000 in 2015 is expected to be met, an increase, as compared to last year, of over 5,000. Renovations and repairs by homeowners are progressing, and projections are expected to be surpassed, which is associated with an increase in sales of construction materials, he said.

Reviewing the country’s water supply, Murillo reported, “At the end of May, reservoirs held 3.363 billion cubic meters of water (37% of capacity), which represents 1.347 billion cubic meters less than last year,” and emphasized the need to save water in all provinces, not only in those where the situation is most critical, which include Santiago de Cuba, Guantánamo and Pinar del Río.

Employment during the first part of 2015 was equal to the 2014 level, during this same period, Murillo reported, while the average salary increased, fundamentally as a result of higher wages in the healthcare sector. The productivity of labor rose 5.3%, he said, adding that productivity and average salaries are favorably correlated in the state enterprise system. He also reported that earnings in state enterprises are expected to surpass projections.

Murillo Jorge next discussed pre-planning underway for the 2016 budget, reporting that the fiscal deficit should be lower than that approved, with the current projection being 4.2% of the GDP, as opposed to the 6.2% originally forecast.

Regarding 2016, he commented that goals are being set which depend on steps which must be taken now, directed toward creating infrastructure; increasing construction and transportation capacity; and supplying resources which contribute to the development of renewable resources, export producers and the substitution of imports with domestic products. Toward this end, he said, a number of measures have been approved.

The economy is functioning at a good growth rate, Murillo reported, saying that the country is in a position to finish the year well, but that continuing to work hard is imperative.


Income to the 2014 state budget reached 47 billion pesos this past year, 103% of the amount projected, reported Lina Pedraza Rodríguez, minister of Finances and Prices, during her presentation of the final report to the Council of Ministers on last year’s state budget.

The greatest portion of total income came from taxes on motor vehicles, sales, and earnings.

Total spending was reported as 49 billion pesos, 98% of the amount projected. Budgeted activities were allocated 33 billion, which included nine billion for public healthcare, eight billion for education, and 1.6 billion for culture, art and sports.

Referring to the social security budget, Pedraza indicated that spending totaled six billion pesos, explaining, “Sixty-six percent of this was covered by social security contributions (from active workers), in accordance with Guideline no.165 approved at the 6th Congress of the Communist Party of Cuba, which proposes reducing the participation of the state budget in financing social security.”

The Council of Ministers approved the the 2014state budget close-out, to be presented to the National Assembly of Peoples’ Power during its upcoming session.

Next came a report from Comptroller General Gladys Bejerano Portela, who indicated that her office had conducted 117 audits of the 2014 budget close-out and the proposed 2015 budget. She reported that law no.117 had been respected for the most part, although shortcomings persist. She explained that most of these emerge at the local level and are associated with bookkeeping, supervision and analysis of budgets, which negatively impact the efficient use of resources.

Bejerano reported that insufficient training of personnel working in municipal finances and prices offices, and of those in charge at budgeted entities; turnover among professionals and directors; and understaffing in general, were noted during the audits.

In this context, she recommended that the Ministry of Finances and Prices design work procedures to improve the process of developing the proposed state budget; update internal auditing methods; and continue training for directors and officials involved in this work.


The Comptroller General also described results of an audit of the Ministry of Domestic Commerce (Mincin), during which 288 entities were visited, representing 80% of the organizations affiliated with the ministry.

It was confirmed that the ministry has identified its principal problems, she said. While acknowledging the complexity of Mincin’s programs and policies, Bejerano noted that its internal control mechanisms are as yet insufficient, saying, “This statement is made on the basis of shortcomings and ways of operating detected, which are repeated and impact the quality of service offered the population.”

Disregard for accounting instructions, as well as ineffective responses to confront and prevent the occurrence of crimes, illegalities and acts of corruption were observed, Bejerano reported.

The greatest number of irregularities were noted in activities related to security and protection, transportation, inventory control, fuel, salaries and accounting, she said.

Mary Blanca Ortega Barredo, minister of Domestic Commerce, responded saying that a plan of corrective measures has been developed for each of the problems identified, including the recruitment of more qualified personnel throughout the system.


Public Health Minister Roberto Morales Ojeda reported on the epidemiological situation in the country, which, he said, is much better than it was this time last year, while noting that vigilance continues to be especially important during the summer months.

He reported that cases of severe diarrhea have declined by 28.7%, and diagnoses of dengue are down 87.9%, reflecting efforts to eliminate breeding sites for the Aedes aegypti mosquito which spreads this disease. Low levels of infection, however, continue in the provincial capitals of Santiago, Holguín and Sancti Spíritus, as well as the municipality of San Miguel del Padrón, in Havana.

Morales reiterated that vigilance remains important in the case of several illnesses drawing attention internationally, to prevent their introduction into the country, mentioning Ebola, pandemic influenza, Middle East Respiratory Syndrome (MERS), the Zika virus, bird flu and Chikungunya.

He said that international health measures are being reinforced, as are clinical and environmental vigilance efforts.

He insisted that state health inspection programs must be improved, given the risk of water and food contamination, and that mosquito control programs be maintained at an intensive level.

The Minister also reported that the availability of hypochlorite in neighborhood pharmacies has been guaranteed, to ensure the purification of water in home tanks and sources of supply.

(Diario Granma)

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