The bad times keep on rolling

As the Cuban economy continues to struggle to deal with the global downturn and its implications, consumers will see at least one relief. The state announced a reduction of up to 20% on the price of 24 basic goods, including food products like ground meat, chicken and canned milk, as well as soap, toothpaste, diapers and detergents. The discounts are in foreign-currency stores, prompting experts to surmise whether the policy change is linked to the scaling down of money remittances from Cubans abroad and the need of the government to increase the circulation of foreign-currency in the internal market.

“There is a certain logic in raising people’s purchasing power to encourage family remittances from abroad,” said economist Jorge Sanguinetty, president of DevTech Systems, based in Miami. “Both the person making the remittance and the one receiving it feel that they can get more for their money.”

Still, the effect will be that consumers will feel less strain on their thin wallets, and that is a good thing. Their problems have only been increasing in recent weeks and months as shelves at the stores hold fewer products in a visible sign of shortages. Indeed, officials recently admitted that Cuba is even running short of toilet paper and may not get sufficient supplies until the end of the year.