As 2025 commenced, Cuba experienced a significant monthly inflation increase of 2.06%, equating to an annual rate of 27.7%. This sharp rise, highlighted by Cuban economist Pedro Monreal on social media, underscores the government's failure to maintain the necessary macroeconomic balance, potentially exacerbating poverty levels across the island.
Five Consecutive Months of Rising Inflation
Monreal pointed out that inflation has been climbing for five consecutive months, indicating a situation spinning out of control. Furthermore, he emphasized that many economists believe Cuba's official figures underestimate the true inflation rate, deepening distrust in government statistics. His analysis is based on the official Consumer Price Index (CPI) report from the National Office of Statistics and Information (ONEI), released last week.
Although the year-over-year inflation rate slightly eased to 24.23% in January 2025 from 31.69% in January 2024, Monreal warns that inflation has hovered between 20% and 32% since November 2023. This high range starkly contradicts official narratives of progress in price control.
Agricultural Crisis and Food Prices
A major driver of inflation in Cuba continues to be the rising cost of food, reflecting the severe agricultural crisis impacting the nation. Monreal noted that the category "food and non-alcoholic beverages" accounted for over 50% of total inflation during most of 2023 and 2024, illustrating the Cuban market's vulnerability to shortages and rising costs of essential goods.
Unexpected Rise in Tobacco and Alcohol Prices
Another notable aspect of the analysis is the unusual 22.72% increase in the prices of alcoholic beverages and tobacco in January, significantly affecting monthly inflation. The economist clarifies that although these products are not deemed essential, their consumption is relatively widespread, and this time, tobacco products had the most significant inflationary impact.
Poverty as an Inflationary Brake
Monreal concluded his analysis by warning about the true factor restraining an even greater inflation surge: the "normalization" of widespread poverty. This is a result of the dramatic decline in the share of labor remuneration as a percentage of the Gross Domestic Product (GDP). According to the economist, beyond official discourse on price "caps" and "controls," the island's economic reality remains mired in precariousness and a loss of purchasing power for the population.
Frequently Asked Questions About Cuba's Inflation in 2025
What is the current inflation rate in Cuba as of 2025?
As of the start of 2025, Cuba's monthly inflation rate is 2.06%, leading to an annualized rate of 27.7%.
Why is food price a significant contributor to inflation in Cuba?
Food prices are a major inflation driver due to the severe agricultural crisis in Cuba, with the category "food and non-alcoholic beverages" contributing over 50% to total inflation in recent years.
How is poverty affecting Cuba's inflation?
Widespread poverty, exacerbated by a decline in labor remuneration's GDP share, is acting as a brake on even higher inflation rates.