What can be expected from the self-proclaimed 'General Staff of the Economy' in Cuba?

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Una de las tantas colas que se forman en Cuba.

The ministries and institutions responsible for macroeconomic management in Cuba have their hands tied ahead of the vaunted “stabilization” behind the regime package. according to a Analysis by economist Pedro Monreal Following the most recent events on the island, including the reversal of some measures and the dismissal of the First Vice President and Minister of Economy and Planning, Alejandro Gil Fernández.

,What to expect in the short term in terms of ‘macroeconomic stabilization’ from Cuba’s self-styled ‘General Staff of the Economy’, “Will they order you to press the brakes, accelerator, or change lanes?” Monreal asked himself in a detailed thread on his account on the social network X.

Analysts base their view on the announcement of the beginning of “the process of strengthening the agencies of the central state administration” and “Deep restructuring of the Ministry of Economy and Planning (MEP) as the General Staff of the Economy,

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“The solid fact is that last December a Fiscal deficit equal to 18.5% of gross domestic product (GDP) And the logic was that this level is compatible with macroeconomic stabilization Some,” Monreal said.

The economist remembered him The “institutional troika” with main responsibility for macroeconomic management in Cuba is composed of the Ministry of Finance and Prices, the Central Bank of Cuba (BCC), and the MEPs.,

“The Ministry of Finance and Prices, which is in charge of fiscal policy and price formation, is the starting point of Huge deficit and double-digit official inflation And realistically in the short term it may do very little. Central Bank, responsible for monetary and exchange policy It makes little use of a potentially powerful tool such as the interest rate, does not have the necessary independence and operates a pathetic exchange market,” he conceded.

Monreal pointed out In many countries the central bank is the main institution of macroeconomic policy, but this is not the case in Cuba., “The BCC will ‘adjust’ the level of fiscal deficit – with unsupported liquidity,” he said.

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“I am very busy with essential but helpful tasks like ‘banking’, The BCC does not take the lead publicly with respect to issues such as monetary and exchange rate pluralism, partial dollarization, exchange rate regimes and rational exchange rates.” he insisted.

In the words of Monreal, MEP “Despite a transformative narrative, the bastion of centrally planned economy planning, Responsible for the allocation of resources, it is decisive for supply and demand.”

He reminded that MEPs have so far been responsible for reforms of two key components that should “re-boost” the economy: the state company and “new actors.” However, “without improving supply capacity, the package will not go very far,” he said.

The Economist reported that “the new state enterprise law has been shelved and it has been announced that the ‘focus’ of non-state actors will be shifted to a new institution.”

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“Despite the above, compared to the other two institutions of the Troika, MEPs probably have more room for maneuver. I do not mean that it offers a concrete and permanent solution. Essentially it does not depend on MEPs,” They said. ,

For Montreal, “It would be expected that in the short term the MEP would be the lead institution in continuing the packageand opined that “he should ‘do something’ before the next meeting of the Council of Ministers which will probably be held at the end of the month.”

,The measures (of the package) are presented as ‘essential and cannot be postponed’, but ‘improvements’ in detail and pace should not be ruled out, In fact, ministerial resolutions for price and tariff increases have not yet been issued. We’ll see…”, he concluded.

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