June 30, 2017 / 6:38 PM / in 23 days

Cuba says economy in line with forecasts so far in 2017

3 Min Read

HAVANA, June 30 (Reuters) - Cuba's economy minister told a cabinet meeting that the economy performed in line with official plans in the first half of 2017, after the government forecast full-year growth of around 2 percent last December, state-run media reported on Friday,

"In order to fulfill the plan, we continue to work on adopting measures to guarantee the activities prioritized that ensure the economy's vitality," Economy Minister Ricardo Cabrisas was quoted as saying.

Communist-run Cuba said in December its economy shrank 0.9 percent in 2016, as it wrestled with declining oil shipments from key ally Venezuela, a slide in exports and a lack of cash.

Western diplomats said there are no signs that any of those problems are abating. Cuba is struggling to pay foreign providers on time and seeking longer payment terms, they said.

President Raul Castro is expected to deliver a full update on the economy in his speech to the national assembly in mid-July.

Meanwhile, Cabrisas highlighted sectors such as agriculture, where production is rising, and tourism, which continues to grow, that are doing well this year. However, tourism could be impacted by tightened U.S. travel rules going forwards.

Marino Murillo, the chief of the commission charged with carrying out reform to update the Soviet-style economy, was cited as saying farmers would now be able to lease parcels of land for 20 years instead of 10, with the option of renewing.

Since deciding in 2008 to lease small parcels of fallow land to would-be farmers, Cuba has leased 1.9 million hectares, representing 31 percent of the country's arable land, he added.

Demand for new parcels was limited because those available were less productive, far away from infrastructure and infested by the highly invasive marabu weed, he added.

Murillo announced a new package of measures to "contribute to improving the organization and the control" of the fledgling private sector. State-media did not include any further details on the measures.

He then listed various infractions that had been detected in the private sector, from use of goods with illicit provenance to failure to fulfill tax obligations.

Workers in the private sector report having to bend Cuba's strict rules and operate in a grey legal area at times for their business to function in the tightly controlled economy with scarce supply of goods.

Restaurants and bars periodically report being closed down by authorities that suspect them of committing infractions. (Reporting by Sarah Marsh; editing by Diane Craft)

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