Fri Dec 28, 2007 12:36pm EST
By Marc Frank
HAVANA, Dec 28 (Reuters) - Cuba said on Friday its economy grew 7.5
percent in 2007, the fourth year the Communist-run country has reported
a big increase in the gross domestic product since being plunged into
crisis by the Soviet Union's demise.
Economy and Planning Minister Jose Luis Rodriguez told a year-end
session of parliament a 10 percent target was not reached due to the
heaviest rains since the early 1960s, import delays and other factors.
Rodriguez said Cuba's GDP would increase 8 percent in 2008.
"The results are significant and above the 5.4 percent norm for the
region ... and at the same time demonstrate the gradual consolidation of
the economy," Rodriguez said.
Rodriguez reported a 24.7 percent rebound in the agricultural sector,
7.8 percent in industrial activity, 7.9 percent in transportation and
11.7 percent in services.
Growth was reported as 12.5 percent in 2006, 11.8 percent in 2005 and 5
percent in 2004, based on a unique Cuban formula that outside experts
such as the Economist Intelligence Unit and the CIA say may overstate
the GDP by 3-4 percentage points.
Cuba's GDP plunged 35 percent in the early 1990s and industrial activity
80 percent with the demise of former benefactor the Soviet Union,
leaving the country in darkness, crippling public transportation and
causing food and other shortages.
A gradual recovery has gained force since 2004 as oil-rich ally
Venezuela began payments for massive social service assistance and soft
credits from China resulted in billions of dollars in new revenues to
restore infrastructure and improve Cubans' often difficult daily lives.
IMPROVED TRADE BALANCE
Rodriguez said exports increased 24 percent and imports just 2 percent
this year, a marked turnaround from recent years when imports soared to
twice the 2004 level and exports stagnated.
Foreign trade totaled $12.18 billion in 2006, with exports of $2.76
billion and imports of $9.42 billion, the government reported.
The trade deficit was offset by more than $6 billion in revenues from
services in 2006, with similar revenues expected for 2007, although
Rodriguez did not mention a figure.
"We have a commercial balance of goods which is better than previous
years," Foreign Trade Minister Raul de la Nuez recently told Reuters.
"Nickel prices are the most important reason our exports are up,
followed by pharmaceuticals and medical equipment and tobacco," de la
"We have been importing a great deal of equipment and products that did
not have to be repeated this year and we are pursuing a policy of
substituting imports," de la Nuez said when asked about the slowdown in
Cuba's current account balance of payments was $240 million in deficit
last year, compared with a surplus of $140 million in 2005, and foreign
debt rose by $2 billion to around $16 billion, the government said.
The current account balance of payments is considered the broadest
measure of any country's external transactions. It includes trade,
services like tourism, and financial transfers like profit repatriation
and interest payments.
Rodriguez made no mention of this year's balance of payments or foreign
debt, reported as $16 billion in 2006 by the government.
(Additional reporting by Nelson Acosta, editing by Vicki Allen)