Sunday, November 02, 2008

Cuba says its national economy grew 6 per cent in the first half of this year

11/2/2008

HAVANA — Cuba's says its economy grew by six per cent in the first half of 2008, but won't maintain that pace because of damage caused by Hurricanes Gustav and Ike.

Economy Minister Jose Luis Rodriguez says the rise in gross domestic product in the year's final six months won't match the results of the first, which finished with six per cent growth.

Hurricane Gustav hit western Cuba on Aug. 30 and Ike slammed into the country's eastern flank barely a week later, then raked most of the island.

The government says the storms caused the greatest storm damage in Cuba's hurricane-battered history, killing seven people, damaging nearly 450,000 homes and crippling food production and infrastructure.

Rodriquez says the principal challenge is the reconstruction of the country, whose losses were initially calculated at $5 billion but which today are seen as far higher.

He offered no new estimates.

However, Civil Defence Chief Ramon Pardo Guerra told visiting Brazilian President Luiz Inacio Lula da Silva that collective damage from the storms had reached nearly 8.7 billion convertible pesos, or about $9.4 billion.

That makes them nearly twice as costly as officials originally believed.

Cuba's measurement of GDP includes spending on free health care, education through college and monthly food rations provided by the communist system - an uncommon methodology that critics say inflates growth figures.

Officially, the economy expanded by 7.5 per cent last year and posted a 12.5 per cent growth rate in 2006.

Rodriguez projected last year that the economy would grow eight per cent in 2008, but he and other officials began warning in July, even before the hurricanes hit, that rising global food and oil prices would cause "inevitable adjustments and restrictions."

Source: Canadian Press

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