For first time in decades, Cuba's private sector outweighs state

Reuters

29-07-2025

HAVANA, July 29 (Reuters) - Cuba's private sector is accounting for more retail sales by value on the Communist-run island than the state for the first time since the years following Fidel Castro's 1959 revolution, new government data shows.
Preliminary figures from the National Statistics Office published last week indicate the "non-state" sector was responsible for 55% of retail sales of goods and services in 2024, up from 44% in 2023. The figures exclude public utilities.
The Cuban government has gradually expanded the role of private enterprise since the 1991 collapse of its former benefactor, the Soviet Union, reversing a 1968 policy that had nationalized all private businesses.
In tandem, the state-run economy has shrunk, contracting by 11% over the last five years and marked by frequent blackouts, goods shortages, and high inflation.
The state still operates thousands of retail outlets offering a limited variety of goods, including food, hygiene products and clothing.
But at bustling informal markets such as the 100th Street Bridge Fair in Havana, hundreds of vendors sell items often unavailable in the state stores.
"There are many things that you cannot find in the state sector," said Diamela Garcia, a clothing vendor at the fair. "Many people come to look for these things here."
María Karla Hernández, a 27-year-old physiotherapist in green scrubs, was shopping for work supplies.
"Here you find everything, although the prices are high," she said.
Cuban economist Omar Everleny cautioned that those high prices boosted the value of the private sector, and that the retail data was not a reflection of overall volume.
"Prices are often subsidized in the state sector and much higher in the private sector," he said. "(But) the state has little cash to import goods ... so people have to turn to the private sector, which is more flexible."
While Fidel Castro, who ruled Cuba from 1959 to 2008, called the private sector a "concession to the enemy," his younger brother and successor Raul Castro took a softer view, saying it was "strategic" and would be an integral part of the economy going forward.
Current president and head of the Communist Party Miguel Diaz-Canel has maintained Raul's position, while insisting that state companies must become more efficient and remain dominant in wholesale trade.
Most local analysts, including Everleny, believe there is ongoing debate within the country's leadership between those who advocate further liberalization of private business and those who oppose it.
Economy Minister Joaquin Alonso told the National Assembly this month that while the country's overall imports have declined, imports by private businesses topped $1 billion, a 34% increase compared to the same period last year.
Alonso said fewer state enterprises were operating in the red "mainly due to an increase in prices and not to an improvement in efficiency," according to reports in state media.
He acknowledged that "non-state economic actors are advancing," adding, "we do not want to confront this sector, but rather to properly guide it."
According to official figures, approximately 1.6 million people in a labor force of 4 million work in the private sector.