For years, Cuba’s official economic data has painted a mirage disconnected from the daily struggles of millions on the island. In a striking analysis, economist Miguel Alejandro Hayes reveals a statistical distortion that conceals the full extent of Cuba’s economic collapse—and the fiction of its gross domestic product (GDP).

According to government figures, Cuba’s GDP jumped from 107.35 billion pesos in 2020 to 545.22 billion in 2021. Converted using the official 2020 exchange rate of 1 USD to 1 CUP—a method still used by the World Bank and many analysts—this would suggest a per capita GDP of $10,736 in 2020, on par with the Dominican Republic or Brazil, and a staggering $54,196 in 2021, rivaling Germany.

“These official figures suggest a per capita GDP of a country that bears no resemblance to Cuba,” said Hayes during a livestream with elTOQUE.

The economist called the conversion absurd when compared with the grim reality on the island: worsening food shortages, constant blackouts, and a minimum wage that barely covered 30% of a very basic individual diet.

The core of the distortion, Hayes argues, lies in Cuba’s several exchange rates: the historical official rate of 1 USD to 1 CUP, the newer official rate of 1 USD to 25 CUP, and the informal market rate, which hovered around 1 USD to 70 CUP in 2021.

Yet the real problem, Hayes explains, is that no single exchange rate—or combination of them—aligns with actual GDP variations or the economic indicators from 2020 to 2021.

Using the official 1 USD to 25 CUP rate, the one applied to the general public, Cuba’s per capita GDP for 2020 drops to just $407, comparable to Afghanistan. Even using the 1 USD to 24 CUP rate often used in state business operations, the figure remains extremely low. For 2021, those same rates yield a per capita GDP of $2,168, roughly equivalent to Haiti.

But suppose the 1 USD to 70 CUP informal market rate—arguably closer to economic reality—is used. In that case, the 2021 per capita GDP plunges to just $774, putting Cuba on par with Niger, one of the world’s poorest countries.

“The lower the per capita GDP, the poorer the country,” Hayes emphasized, explaining that developed nations generally report annual per capita incomes of $20,000 to $50,000, while the poorest in Latin America fall below $4,000.

This data scatter, Hayes says, highlights not just statistical manipulation but also explains why organizations like the Economic Commission for Latin America and the Caribbean (ECLAC) now speak of Cuba in percentages rather than absolute numbers. “It’s like someone said, ‘I’m embarrassed to publish this number,’” he remarked.

An Economy in Ruins

In the absence of credible official data, Hayes developed an alternative method based on foreign trade and consumption patterns. Given that Cuba imports roughly 80% of its consumables and applies markup rates close to 300%, he estimated final annual goods consumption at $9.79 billion, factoring in domestic production as well.

For services like water, electricity, gas, telecommunications, and transportation, Hayes used regional price benchmarks, estimating consumption at $11.84 billion.

By combining these figures with investment levels, public spending, and trade balance data, Hayes calculated a realistic GDP of $29.67 billion for the year, translating to a per capita income of $2,668. Applying the same model to 2020 results in per capita GDP figures ranging between $2,422 and $3,085.

Even under the most generous assumptions, Cuba remains among the five poorest countries in Latin America, far removed from the official statistics that equate its economy with that of more developed nations.

One of Hayes’s most alarming findings concerns food consumption. He estimates that the average Cuban spends no more than $25 per month on food, calling the figure “scandalous” and well below international poverty thresholds.

Compounding this is Cuba’s worsening energy crisis. Hayes estimates—“generously,” he says—that blackouts average 15 hours a day. Some areas have reported going more than 20 hours a day without power, according to official acknowledgments.

Hayes is unequivocal about the prospects for recovery under the current system. “Even if Cuba doubled its GDP tomorrow, it would still rank among the five poorest countries in Latin America.”

To grasp the enormity of the challenge, Hayes offers context: “When a country grows by 5%, it’s a cause for celebration. A boom might be 10 or 12%, but that’s not sustainable.”

He argues that for Cuba to reach the regional average per capita GDP, it would need to more than triple its current economic output.

Achieving even 2% growth, he adds, “is science fiction”—and that’s based on 2021 data. “Today, recovery is even harder.”

Hayes acknowledges that his analysis relies on assumptions about the ratio between imports and domestic production, which is itself difficult to measure. Many analysts prefer comparing GDP per capita using purchasing power parity (PPP), which adjusts for local price levels and exchange rates.

But according to Hayes, PPP relies on final prices that inherently reflect exchange rates, and in Cuba’s case, those prices—especially in the state sector—do not reflect real market values. Furthermore, scarcity makes standardized consumption baskets unrealistic.

Accurately breaking down the components of Cuba’s GDP requires extensive data—data that simply isn’t available. Yet, Hayes’s analysis offers a rare, informed estimate of the real size of Cuba’s economy—and a stark warning about the risks of ignoring currency distortions when assessing its health.