Cuba experiences decrease in population purchasing capacity – Escambray

Cuba experiences decrease in population purchasing capacity – Escambray
Cuba experiences decrease in population purchasing capacity – Escambray

The head of the Implementation Commission commented that the business sector has generally complied with the design planned at the beginning of the year

Murillo valued the Ordering Task before the deputies to the National Assembly of People’s Power. (Photo: PL)

The purchasing power of Cubans was greatly affected after nine months of monetary regulation, due to inflation higher than expected, explained the head of the Commission for the implementation of the Guidelines, Marino Murillo.

Before the deputies to the National Assembly of People’s Power (parliament), the official detailed some of the results observed after the implementation of this task on January 1 of this year, which implied wage and price reforms, and the elimination of the monetary and exchange duality.

The designed retail inflation predicted a growth of 1.6 times in total sales, while the population’s income would do so around five times, which meant an increase in the consumer price index of 60 percent, said Murillo. .

However, the reality shows a significant deterioration in the purchasing power of the population, fundamentally of the lower-income sectors, he added, and exemplified that the basic basket of goods and services was 1.85 times higher than the planned design and, therefore, Therefore, it was above the minimum pension that took that value as a reference.

The supply deficit, where the crisis generated by the covid, the economic blockade of the United States and its coercive measures on the island, among other factors, have a negative effect on the implementation of the ordinance.

Other elements are added, such as the increase in the prices of transport, construction materials and food, as well as an informal exchange rate that fluctuates around the value of one dollar for each Cuban peso, when the official rate is one per 24 .

This exchange rate difference, although it occurs in the underground market, generates an inflation of 6,900 percent and impacts all economic actors, said Murillo.

In this sense, he warned of the risk that this represents, since on the one hand raw materials are acquired under an exchange rate (1 × 24), while prices are formed under the other (1 × 70), which allows different actors economic generate profits even if they do not generate wealth.

This can have an impact on imported products having lower prices than national ones, in an economy that needs to produce and generate offers, in addition to being one of the distortions that the ordering task sought to eliminate.

The head of the Implementation Commission commented that according to studies carried out in more than 1,800 business structures of different conformation, in this sector the design foreseen at the beginning of the year has been generally fulfilled, since they managed to make the necessary adjustments and greater transparency of accounting.

However, retail inflation and circulating money are alerts for the design of the economy plans and the budget for 2022.

To achieve a monetary balance, the State had to collect 92 percent of people’s income, but the calculations point to figures that are around 67 percent, while there are more than 59 billion pesos (2.458 billion dollars ) On circulation.

Faced with these realities, the government adopted 35 measures to stop inflation, but the business sector has to react and produce wealth, Murillo stressed, adding the need for greater participation by national producers to meet the demands.

Likewise, greater control of liquidity in the hands of the population and compensatory measures are needed to care for the most vulnerable.

 
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