Cuba says rising global food, oil prices will cause economic 'restrictions'

Cuba says rising global food, oil prices will cause economic 'restrictions'
The Associated Press
Published: July 8, 2008

HAVANA: Rising global food and oil prices will cause "inevitable
adjustments and restrictions" for Cuba's economy, officials warned on
Tuesday.

The communist government had projected that gross domestic product would
expand by 8 percent in 2008, but Economy Minister Jose Luis Rodriguez
suggested that might no longer be possible.

"The impact of the substantial elevation of prices of food and fuel on
the international market so far this year and the speculation for the
rest of it will require inevitable adjustments and restrictions on the
national economy," the Communist Party newspaper Granma reported, citing
comments Rodriguez made to a parliamentary commission meeting Monday.
The event was closed to foreign reporters.

There were no details on what "adjustments and restrictions" would be
required.

Rodriguez said tourism expanded by at least 14 percent in the first half
of the year, and Cuba's agricultural output grew 7.5 percent, the
newspaper said, without giving raw figures. He said industrial
production increased 6.2 percent.
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Cuba said its economy grew by 7.5 percent in 2007 and Rodriguez said in
December that he expected 8 percent growth this year.

Cuba's measurement of GDP includes spending on free health care,
education and monthly food rations — an uncommon methodology that
critics say inflates growth figures. Officially, the economy expanded by
12.5 percent in 2006 and 11.8 percent in 2005.

Cuba is trying to slash its dependence on imported food, which will cost
it nearly US$2 billion this year.

Granma also reported that Basic Industry Minister Yadira Garcia told
lawmakers that crude oil production topped 2.1 million tons through
June, exceeding expectations by more than 6 percent.

Despite increasing oil production, Cuba relies heavily on Venezuela,
whose socialist President Hugo Chavez sends nearly 100,000 barrels of
oil a day to the island in exchange for social services, including Cuban
doctors.

Venezuelan oil and borrowing fro

http://www.iht.com/articles/ap/2008/07/08/business/CB-Cuba-Economy.php