Cuba reports of a slowdown in the economy

Cuba says it has suffered one of the most difficult years since the collapse of the Soviet Union.

Economy Minister Jose Luis Rodriguez said that Cuba’s economy had grown by 4.3% in the past year, dropping below 8% forecast by the government.

President Raúl Castro called for austerity measures including reductions in official travel and bonuses.

Cuba was affected by Hurricanes Gustav, Ike and Paloma this year, with estimated losses of nearly $ 10bn (£ 6.7bn).

The cost of food imports has also increased by more than $ 8BN on the previous year.

As Cubans prepare to celebrate the 50th anniversary of the revolution, the authorities had hoped that the central controlled by the state run economy to escape the worst of the global financial crisis, the BBC said Michael Voss in Havana.

Mr Rodriguez said that last year has been one of the most difficult since the so-called “special period” began – the term used by the economic crisis caused by the 1991 collapse of the Soviet Union, which heavily subsidized Cuba.

The president of the Cuban parliament’s Economic Commission, Osvaldo Martinez, blamed the lower growth rate of factors outside the control of the country.

“The economic growth of 4.3% is less than 8% in the plan, and this is understandable, given the profound devastation caused by hurricanes, the economic war against us and the remarkable increase in food prices and the fuel for most of the year, “he said.

Cuba estimates its gross domestic product in the state, including spending on health care, education and food rationing, our correspondent says.

This means that the figure reflects government spending, not just economic activity, as it does in other parts of the world.

Travel braking

Mr Rodriguez predicted that the Cuban economy would grow by 6% in 2009.

President Raúl Castro, who took over from his brother Fidel in February, told the National Assembly “accounts do not square up.”

“We have to be realistic and adjust our dreams to the real possibilities,” he said.

“This means fulfilling the socialist principal receives each according to his work.”

Mr Castro said the government would reduce the government trips abroad by 50% and end programs that reward workers, business leaders and officials with free vacations at a cost to the government of $ 60th year.

Latin American leaders recently urged U.S. President-elect Barack Obama to end the 46-year trade embargo on Cuba.

Mr Obama has said it would lift restrictions on family travel and remittances to Cuba, but maintained the U.S. trade embargo to press for changes in the term Communist country.

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