269. Paper Prepared in the Central Intelligence Agency0
THE CUBAN ECONOMY IN 1961 AND 1962 AND PROSPECTS FOR 1963 THROUGH 1965
Summary and Conclusions1
The Cuban economy during 1963 probably will not decline further in total output and may show some improvement in comparison with [Page 666] 1962. Cuban GNP in 1962, measured in 1958 prices, is estimated to be 25 percent below the 1958 level. The total supply of available goods, however, was only about 20 percent lower than in 1958 because Cuba ran a trade deficit in 1962 that was substantially higher than the deficit in 1958.
Total agricultural output will not increase much during 1963, for the sugar harvest probably will decline slightly from last year, largely offsetting moderate gains in other crops. Industrial production will increase to some extent as Cuba’s new managerial class gains experience and the economy begins to regain some of its lost efficiency. Investment also probably will expand as a number of new industrial projects are started during the year. The dynamic upward improvement of prices in the world sugar market probably will raise Cuba’s export earnings in 1963 above the 1962 level. The increase will not be enough, however, to finance the required volume of imports, and Cuba will still require large balance-of-payments credits from the Sino-Soviet Bloc.
It appears probable that the Cuban economy will continue to improve during 1964 and 1965. The government is making vigorous efforts to expand agricultural production. The traditional failure of most Communist regimes to achieve satisfactory results in agriculture, however, precludes the prediction of any dramatic successes for Castro in this sphere during 1964-65. Continuing improvement at the managerial level may well yield further increases in industrial production. Investment activity also probably will continue to expand. Finally, the outlook for export earnings suggests that Cuba will remain dependent on the Bloc for large industrial and balance-of-payment credits.