By WILL WEISSERT
HAVANA – Cuba says its budget deficit came in far below forecasts in the
first half of 2010, evidence that tax increases and deep spending cuts
on food imports may be helping the communist government weather a severe
Cuba reported on Thursday a deficit of nearly $410 million for the
six-month period, less than a quarter of the $1.7 billion that central
planners originally predicted.
Lina Pedraza, minister of finances and prices, said Cuba generated a bit
more than $21.2 billion. Over the same period, it spent $21.6 billion —
creating the smaller-than-expected shortfall.
The figures were made public in the Communist-party newspaper Granma.
They were approved by the nation's Economic Affairs Commission, a slate
of lawmakers that huddled prior to a full session of parliament Sunday.
Cuba has slashed imports to deal with its economic problems,
particularly in the areas of food and agriculture.
But Pedraza attributed the lower deficit to higher taxes and improved
collection methods, as well as a new law that pushed back the retirement
age from state jobs while upping the amount government employees
contribute to, and receive from, state pension funds.
The government controls well over 90 percent of the economy and pays
employees about $20 per month, but also provides free education through
college and health care. Subsidies also are provided for housing,
transportation and some food through monthly ration books.
The outlook remained unexpectedly rosy, according to Pedraza, despite a
roughly $198 million deficit created by ordinary Cubans, who have fallen
behind on payment plans to reimburse the state for refrigerators, air
conditioning units and other appliances authorities have distributed in
The government provided them as part of an effort to save energy and
relieve strain on the island's creaking electric grid, but requires that
Cubans pay back the costs of the appliances over time. But many
consumers have been unable to keep up with their payments, pushing state
budgets further into the red.
Sales also were weak for Cuba's world-famous cigars and the domestic
consumption of industrial goods, beer and eggs.
President Raul Castro is expected to preside over a twice-annual
parliament session. The 79-year-old often uses the session to announce
new policies, and many are expecting him to make a speech since he did
not do so at Monday's Revolution Day commemoration — the top event on
Cuba's official calendar.
His brother Fidel, who turns 84 on Aug. 13, has made a spate of recent
public appearances, but has refrained from talking about Cuban current
events, and it was not clear if he would attend parliament.
The gray-bearded Fidel gave up Cuba's presidency, first temporarily,
then permanently, after a health crisis in July 2006. He remains head of
the island's Communist Party and is a parliament deputy, however, though
he has not attended a session since December 2005.