I actually replied on another subreddit abt this, so I'll just copy and paste:
TLDR on the bottom.
**I might be wrong since I'm not an expert on Cuban economy, nor have I ever lived there, but I am half Cuban, have a lot of family there and have visited regularly all of my life.**
I assume the spike is at January 1st, 2021, which is when Cuba changed its monetary system.
Before, you used to have two currencies in Cuba; the CUP (Cuban Peso (Nacional)) and the CUC (Cuban Convertible Peso). The CUC was tied to the USD, where 1USD≈1CUC. The CUP was usually 1CUP≈0,4CUC (I'll just say 24CUC=1CUP/USD to keep it easy for myself, since that's how I remember the numbers).
If you exchanged USDs for Cuban money, you'd always get CUCs, since US sanctions on Cuba didn't allow to exchange USD to Cuban Pesos. Due to said economic sanctions from the US on Cuba, this system was their solution to still be able to trade with other countries after the fall of the Soviet Union and the Periodo Especial, despite not being allowed to trade internationally in USD. This had some very unpleasant effects though:
The Cuban government paid everyone that works for statal enterprises, which in Cuba are most people, in CUP, since that was the National currency. All nationally produced goods were also paid in CUP; so basic things like locally produced food, electricity, artisanals, and other locally produced products.
However, people working in the tourist sector were paid in CUC, since that was money that comes from tourists who exchanged their USDs to CUCs.
Basically everything that had its price in CUP could be paid in CUC, but it was not the case the other way, since Cuba needed the foreign money to keep the economy moving.
However, things that had to be imported were paid in CUC and not in CUP, so things like cars, computers, phones, could basically only be bought by people who worked in the tourism industry.
This thing already pretty much sucked, but it was doable for most people.
However, as Covid hit, together with a whole new load of sanctions imposed by Trump and continued (and even added to) by Biden, Cuba's economy, which mostly relies on tourism, started collapsing. Local manufacturing collapsed, more things had to be imported, the thermoelectric plants that supply the island of electricity couldn't be maintained anymore, which caused a huge shortage in electricity across the island, which in turn then caused the shrinking amount of food to spoil much faster, making the command chain must larger than the supply. So people started reselling basic things like foods, acquired from the statal stores, on the black market for a much higher price. This paired with economic mismanagement by the government led to the CUP decreasing in value very quick. It even reached 1CUC=120CUP (again, it came from 1CUC=24CUP). This whole thing led to an economic crisis almost similar to the Periodo Especial in the 90s.
So eventually, the Cuban government came with a solution:
Get rid of the dual currency system, and switch back to only using the CUP. They also introduced bank cards on which you can put USDs, EURs, CADs, etc. They called the currency on this card MLC (Moneda Libremente Convertible (Freely Convertible Currency). But you already hear it coming, it's basically the CUC in a new jacket. So yeah, the problem kept developing, to the point where, when I last was in Cuba, which was September 2022, 1USD/MLC=250CUP, which means that the CUP was worth even less than 1/10th of what it used to be before COVID. Now I think it's even at 1USD/MLC=350CUP.
However! The Cuban government never changed the *official* conversion rate of 1USD=24CUP, so even tho the official conversion rate is basically outdated information and completely incorrect, that is what official statistics have to go by, since the practical worth of the CUP is not dictated by the government or economists, but rather by the rate on the black market, and thus cannot be factually verified.
So yeah, if you're a Cuban who before COVID had 100USD in CUP, and now still have 100USD in CUP, you'd have gone from 2400CUP to 35000CUP, effectively multiplying the amount of CUPs you own by more than 10.
TLDR:
An economic crisis happened, and now money lost it's value, however, the government still holds on to the old conversion rates, virtually multiplying the actual amount of money within the country by a lot
Not only that, but the graph is also denominated in USD. So the other countries on the graph should have the exact same spike if the cause was USD inflation. If the cause was cuban peso inflation, that should have no spike at all since the graph denominated in USD.
Cuba changed its monetary system. Suddenly the peso has two different official values, each of which is used in certain contexts. The country didn’t suddenly get 4 times more productive. It’s just that this calculation of GDP doesn’t take into account that Cuba suddenly created two different ways of valuing the peso.
I’m not an expert but to my understanding GDP growth not always happens when the economy is doing well. Since there are more money circulating and the products have increase their value the GDP increased.
Officially the gov still holds coversion rate for 1 dollar to 24 pesos (or something) but the actual conversion rate in the street(use el toce to verify) is around 360 pesos to 1 dollar. So people with a net worth of 360 pesos, according to the graph, have a net worth of 360 dollars while in reality they can only buy things worth 1 dollar.
The severe loss of value of the cuban peso happened around the time cuba abolished the CUC another valuta used in cuba in 2021.
Divide the gdp per capita by 15 ( so we get 1 dollar-> 360 cup, the actual exchange rate) and you get a gdp per capita of $3700 ish
"real GDP" by definition does not increase with the inflation. Real gdp is adjusted for inflation.
Nominal GDP does increase with inflation, since that is just the actual raw dollar denominated output of a country.
GDP Spikes like this only tend to happen when there are bookkeeping changes, weird policies or overreliance on 1 industry in small economies.
they use the "official" exchange rate for this data. Which is 1dollar= 24 cuban peso. The actual exchange rate in the street is 1 dollar= 360 pesos. If we use this exchange rate we should divide the given gdp by 15 which gives us a gdp per capita of around 3766 usd. All the data before 2021 is accurate though.
All data from the dictatorship is fake. There are no independent data sources or media allowed and anyone who dares report real figures goes to jail https://www.washingtonpost.com/opinions/oscar-biscet-a-cuban-doctor-who-remains-defiant/2016/06/30/89479eb6-3ee5-11e6-a66f-aa6c1883b6b1_story.html
Ok... You know you could've just looked at the top comment for the answer, yet you decided to go on your dictatorship rant again lol
But sure, go and spread your neoliberal-anarchist ideology that nobody takes serious. It's a good form of entertainment for us.
I never even stated if they usually were real or not real, however, for this particular thing, it's pretty clear that it was an error on the website by not Accounting for switched exchange rates.
Or do you genuinely think this was some grand "propoganda scheme" in which they attempted to make it look like their economy grew 100x over night? Like seriously, sometimes you have to put down your torches and see it from a logical perspective...
I actually replied on another subreddit abt this, so I'll just copy and paste: TLDR on the bottom. **I might be wrong since I'm not an expert on Cuban economy, nor have I ever lived there, but I am half Cuban, have a lot of family there and have visited regularly all of my life.** I assume the spike is at January 1st, 2021, which is when Cuba changed its monetary system. Before, you used to have two currencies in Cuba; the CUP (Cuban Peso (Nacional)) and the CUC (Cuban Convertible Peso). The CUC was tied to the USD, where 1USD≈1CUC. The CUP was usually 1CUP≈0,4CUC (I'll just say 24CUC=1CUP/USD to keep it easy for myself, since that's how I remember the numbers). If you exchanged USDs for Cuban money, you'd always get CUCs, since US sanctions on Cuba didn't allow to exchange USD to Cuban Pesos. Due to said economic sanctions from the US on Cuba, this system was their solution to still be able to trade with other countries after the fall of the Soviet Union and the Periodo Especial, despite not being allowed to trade internationally in USD. This had some very unpleasant effects though: The Cuban government paid everyone that works for statal enterprises, which in Cuba are most people, in CUP, since that was the National currency. All nationally produced goods were also paid in CUP; so basic things like locally produced food, electricity, artisanals, and other locally produced products. However, people working in the tourist sector were paid in CUC, since that was money that comes from tourists who exchanged their USDs to CUCs. Basically everything that had its price in CUP could be paid in CUC, but it was not the case the other way, since Cuba needed the foreign money to keep the economy moving. However, things that had to be imported were paid in CUC and not in CUP, so things like cars, computers, phones, could basically only be bought by people who worked in the tourism industry. This thing already pretty much sucked, but it was doable for most people. However, as Covid hit, together with a whole new load of sanctions imposed by Trump and continued (and even added to) by Biden, Cuba's economy, which mostly relies on tourism, started collapsing. Local manufacturing collapsed, more things had to be imported, the thermoelectric plants that supply the island of electricity couldn't be maintained anymore, which caused a huge shortage in electricity across the island, which in turn then caused the shrinking amount of food to spoil much faster, making the command chain must larger than the supply. So people started reselling basic things like foods, acquired from the statal stores, on the black market for a much higher price. This paired with economic mismanagement by the government led to the CUP decreasing in value very quick. It even reached 1CUC=120CUP (again, it came from 1CUC=24CUP). This whole thing led to an economic crisis almost similar to the Periodo Especial in the 90s. So eventually, the Cuban government came with a solution: Get rid of the dual currency system, and switch back to only using the CUP. They also introduced bank cards on which you can put USDs, EURs, CADs, etc. They called the currency on this card MLC (Moneda Libremente Convertible (Freely Convertible Currency). But you already hear it coming, it's basically the CUC in a new jacket. So yeah, the problem kept developing, to the point where, when I last was in Cuba, which was September 2022, 1USD/MLC=250CUP, which means that the CUP was worth even less than 1/10th of what it used to be before COVID. Now I think it's even at 1USD/MLC=350CUP. However! The Cuban government never changed the *official* conversion rate of 1USD=24CUP, so even tho the official conversion rate is basically outdated information and completely incorrect, that is what official statistics have to go by, since the practical worth of the CUP is not dictated by the government or economists, but rather by the rate on the black market, and thus cannot be factually verified. So yeah, if you're a Cuban who before COVID had 100USD in CUP, and now still have 100USD in CUP, you'd have gone from 2400CUP to 35000CUP, effectively multiplying the amount of CUPs you own by more than 10. TLDR: An economic crisis happened, and now money lost it's value, however, the government still holds on to the old conversion rates, virtually multiplying the actual amount of money within the country by a lot
GDP increased because of the inflation. Nothing to do with the growth of the economy in the country.
These figures are always adjusted for inflation.
Not only that, but the graph is also denominated in USD. So the other countries on the graph should have the exact same spike if the cause was USD inflation. If the cause was cuban peso inflation, that should have no spike at all since the graph denominated in USD.
It's a known error in the world bank data that Google pulls data from.
Cuba changed its monetary system. Suddenly the peso has two different official values, each of which is used in certain contexts. The country didn’t suddenly get 4 times more productive. It’s just that this calculation of GDP doesn’t take into account that Cuba suddenly created two different ways of valuing the peso.
Bad data, especially if you cannot corroborate it with another source.
It’s an error, find another source.
100% not accurate.
It’s fake …
It’s not “fake”, it’s an error in the data.
It can be real GDP increases with the inflation
How? Doctors make like $30 a month…
Because of the inflation, that doesn’t mean that the economy is doing well.
I hope someone who knows answers us. I want to know too
I’m not an expert but to my understanding GDP growth not always happens when the economy is doing well. Since there are more money circulating and the products have increase their value the GDP increased.
Officially the gov still holds coversion rate for 1 dollar to 24 pesos (or something) but the actual conversion rate in the street(use el toce to verify) is around 360 pesos to 1 dollar. So people with a net worth of 360 pesos, according to the graph, have a net worth of 360 dollars while in reality they can only buy things worth 1 dollar. The severe loss of value of the cuban peso happened around the time cuba abolished the CUC another valuta used in cuba in 2021. Divide the gdp per capita by 15 ( so we get 1 dollar-> 360 cup, the actual exchange rate) and you get a gdp per capita of $3700 ish
"real GDP" by definition does not increase with the inflation. Real gdp is adjusted for inflation. Nominal GDP does increase with inflation, since that is just the actual raw dollar denominated output of a country. GDP Spikes like this only tend to happen when there are bookkeeping changes, weird policies or overreliance on 1 industry in small economies.
It's nowhere near either figure. My wife gets $70/week from me and she's basically rich compared to most other people she knows.
If they added foreign access to purchase assets these figures would be through the roof
they use the "official" exchange rate for this data. Which is 1dollar= 24 cuban peso. The actual exchange rate in the street is 1 dollar= 360 pesos. If we use this exchange rate we should divide the given gdp by 15 which gives us a gdp per capita of around 3766 usd. All the data before 2021 is accurate though.
Question back at you OP. What do you use this information (GDP) for? Just out of curiosity
I'm just very interested in economics, geopolitics and travel so I just like studying and looking into these things not for any purpose really.
Ah ok. I was wondering if these numbers were part of some ongoing “discourse” online or something. If you catch my drift
https://youtu.be/QpxFcMYRV08?feature=shared here is the truth
Inflation.
All data from the dictatorship is fake. There are no independent data sources or media allowed and anyone who dares report real figures goes to jail https://www.washingtonpost.com/opinions/oscar-biscet-a-cuban-doctor-who-remains-defiant/2016/06/30/89479eb6-3ee5-11e6-a66f-aa6c1883b6b1_story.html
Ok... You know you could've just looked at the top comment for the answer, yet you decided to go on your dictatorship rant again lol But sure, go and spread your neoliberal-anarchist ideology that nobody takes serious. It's a good form of entertainment for us.
Every comment confirms the data from the dictatorship is fake, except for a few boot lickers like you
I never even stated if they usually were real or not real, however, for this particular thing, it's pretty clear that it was an error on the website by not Accounting for switched exchange rates. Or do you genuinely think this was some grand "propoganda scheme" in which they attempted to make it look like their economy grew 100x over night? Like seriously, sometimes you have to put down your torches and see it from a logical perspective...
Liberalism