Cuban Growth Revised Down On Covid Surge, Social Unrest

• Fitch Solutions has downwardly revised its 2021 real GDP growth forecast for Cuba to 1.0%, from 2.7% previously, as the country grapples with a severe spike in COVID-19 cases and social unrest. 
• This follows an 11.0% contraction in 2020, the worst in Cuba since 1993, as the arrival of the pandemic brought the island’s tourism industry to a halt and US sanctions cut off remittance inflows, generating hard currency shortages that undermined imports and private consumption. 
• While Cuba’s rebound will gain steam in H221 and 2022 as vaccinations pick up domestically and abroad, leading to 4.2% growth in 2022, US sanctions relief is highly unlikely in the coming quarters. 
• Over the longer term, a recent economic reform push could boost Cuba’s growth trajectory if the government keeps the reforms in place post-pandemic.

(Source: Fitch Solutions)