Weekly Report - 6 January 2004

CUBA | Growth in 2003 well over target. Economy minister José Luis Rodrí­guez reports that Cuba's GDP grew last year by 2.6%, more than twice the rate achieved in 2002 and well over the target of 1.5% set at the beginning of the year. Rodrí­guez says that if the calculation were to include the services provided gratis by the state, last year's growth rate would have been 3.8%.

Exports were up 14.1% (with high world prices offsetting the decline of ferronickel output) and imports 13.4%, which kept the trade deficit close to target. Tourism revenues increased by 16% as the number of visitors rose by 12.7% (they are spending more) to 1.9m, just shy of the 2m official target.

NICARAGUA | Financial circumstances eased. Central bank president Mario Alonso has noted that with the write-off of 80% of Nicaragua's external debt under the HIPC scheme, due to take place this month, Nicaragua will start saving about US$200m annually in debt servicing. Further relief will come from the renegotiation of the domestic debt with local banks, under which repayment terms have been stretched from one to ten years. Last year domestic interest rates fell by five percentage points.

Alonso has confirmed that Nicaragua's GDP expanded by 2.3% in 2003.

PANAMA | Improved growth outlook. Economy minister Norberto Delgado expects Panama's GDP to grow this year by 4% to 4.5%, `in spite of the fact that we will be in an electoral period.' He says that when the final figures for 2003 are in they will show that the economy has grown by 3.9% to 4.2% — a significant climb from the rates recorded in the previous two years (0.3% in 2001, 0.8% in 2002).

DOMINICAN REPUBLIC | Dollar rate to rise again. The military-led effort to drive down the exchange rate did succeed on paper: by year-end the dollar was being quoted at RD$35 (short of what the government had promised, though within what the IMF had pressed for). However, it was proving almost impossible to conduct transactions at that rate, as dollars had vanished from the market. Next year's budget has quietly been calculated on the assumption that the rate will climb back up to RD$40, a sign that neither the government nor the IMF believe that the current value can be held.