Tuesday, November 06, 2007

Cuban exports boom as imports steady - minister

Tue Nov 6, 2007 8:44pm GMT

By Marc Frank

HAVANA, Nov 6 (Reuters) - Cuba's foreign trade balance will show improvement in 2007 for the first time in years, with exports up 44 percent through September and imports 3 percent higher, the island nation's trade minister said on Tuesday.

Foreign trade totaled $12.18 billion in 2006, with exports of $2.76 billion and imports of $9.42 billion, the government reported.

The trade deficit was offset by more than $6 billion in revenues from services.

"We have a commercial balance of goods which is better than previous years," Foreign Trade Minister Raul de la Nuez told Reuters during a brief interview at Cuba's international trade fair in Havana on Tuesday.

De la Nuez said he expected the year-end figures to be similar to those through September, meaning exports would increase by more than $1 billion and imports by less than $300 million.

"Nickel is the most important reason our exports are up, followed by pharmaceuticals and medical equipment and tobacco," de la Nuez said.

Cuban nickel and cobalt exports garnered around $1.3 billion in 2006 on output of 74,000 tonnes of unrefined product.

Cuban imports have doubled since 2003 as foreign exchange earnings jumped, due mainly to increased revenues from nickel and tourism, payment for medical services exported to Venezuela and soft credits from China.

The import boom sparked a trebling in economic growth during the same period, reaching more than 12 percent in 2006 using a Cuban formula that includes free health and education services. Using the customary formula to calculate gross domestic product, it grew around 8 percent.

Over the last few years, communist-run Cuba has spent billions of dollars to improve its energy grid and other infrastructure in poor condition after years of crisis that followed the demise of the Soviet Union, its former patron.

"We have been importing a great deal of equipment and products that did not have to be repeated this year and we are pursuing a policy of substituting imports," de la Nuez said when asked about the slowdown in imports.

Some western diplomats and Cuban economists said they saw the trade data as a step in the right direction even though it meant Cuba's import-dependent economy would slow this year.

Cuba's current account balance of payments was $240 million in deficit last year, compared with a surplus of $140 million in 2005, and foreign debt rose by $2 billion to around $16 billion, the government said.

The current account balance of payments is considered the broadest measure of any country's external transactions. It includes trade, services like tourism, and financial transfers like profit repatriation and interest payments.

(Editing by Eric Walsh)

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