MIAMI — Cuba’s government announced a new peso devaluation this week. The markets — such as they exist in Cuba’s tightly controlled economy — were not impressed. The informal exchange rate, which Cubans use as the real measure of purchasing power, barely moved in response. When a currency devaluation is so expected that it produces no reaction, it is a signal of how far confidence in the monetary system has eroded.
That erosion did not begin with the U.S. oil blockade imposed in January. It has been building for decades. What the blockade has done is accelerate a collapse that was already underway — removing the margin that allowed the Cuban government to manage, however poorly, the basic functions of the state.
The result, in the spring of 2026, is a country where diesel arrives by tank truck because pipeline infrastructure has degraded to the point of unreliability, where hospitals operate on rotating power cuts, where the peso has lost the majority of its value against the dollar in informal markets, and where a generation of Cubans has concluded that there is no economic future for them on the island. More than 700,000 Cubans emigrated between 2022 and 2024 — a peacetime exodus without modern precedent in the Western Hemisphere.
How Cuba Got Here
Cuba’s economic crisis has two authors, and honest accounting requires naming both.
The first is six decades of centrally planned economic mismanagement. The Cuban state controls the vast majority of the economy — agricultural production, retail distribution, industrial output, foreign trade — through a system of state enterprises that have consistently underperformed, failed to invest in infrastructure, and suppressed the private sector activity that could have generated growth.
Cuba’s agricultural sector, operating on some of the Caribbean’s most fertile land, has not fed its population adequately for thirty years. The country imports roughly 70% of its food. That is not a product of sanctions. It is a product of policy choices made in Havana.
The second author is U.S. sanctions policy, which has restricted Cuba’s access to international finance, technology, and trade for more than sixty years and which, under the current administration, has tightened to a degree not seen since the early Cold War.
The January oil blockade removed Cuba’s ability to import the fuel it needs to run power plants, transport food and medicine, and keep what remains of its industrial base functioning. The humanitarian consequences are direct and measurable.
UN Secretary-General António Guterres stated last week that he is “very worried with the humanitarian situation” in Cuba, describing U.S. sanctions as violations of international law.
That assessment reflects the view of most of the international community. It does not resolve the separate question of what the Cuban government has done — and failed to do — with the economic sovereignty it has exercised for six decades.
The Numbers
Cuba’s GDP contracted for the fifth consecutive year in 2025, according to estimates from the UN Economic Commission for Latin America and the Caribbean. Official Cuban government statistics, historically unreliable, have not been independently verified. Inflation, measured informally through the peso-dollar exchange rate, has run at triple-digit annual rates for three consecutive years. The official rate set by the state — used for government transactions — bears no relationship to the rate at which Cubans actually exchange currency in daily life.
The new devaluation announced this week adjusts the official rate closer to informal market levels, a technical correction that economists have long recommended. But devaluation without accompanying structural reform — liberalization of agricultural markets, expansion of private enterprise, removal of the dual-currency distortions that have plagued the Cuban economy for decades — does not address the underlying conditions.
Previous devaluations have produced the same market non-reaction: a momentary adjustment followed by renewed divergence between the official and informal rates as the structural problems reassert themselves.
Power cuts now run between 12 and 20 hours per day in most Cuban provinces, according to reporting by 14ymedio and El Toque, two independent Cuban news outlets operating from outside the island. The cuts are a direct consequence of fuel shortages — Cuba’s thermoelectric power plants require oil to operate, and oil imports have effectively halted.
The Cuban government has not published current generation capacity figures.
What Ordinary Cubans Are Living
The macroeconomic data describes a system in failure. What it does not fully convey is what that failure looks like at the level of a family in Havana, Santiago, or Holguín trying to eat, work, and keep children in school.
Food prices in informal markets — where most Cubans actually shop, because state stores are frequently empty — have increased by multiples over the past two years. A pound of chicken, when available, costs the equivalent of a day’s salary at state wages. Medicines for chronic conditions including hypertension, diabetes, and asthma have been in shortage since 2021 and are now, in many provinces, simply unavailable through state pharmacies. Families rely on remittances from relatives abroad — primarily in the United States, Spain, and Cuba’s broader diaspora — to purchase basic goods in the informal economy.
Those remittances, which the Inter-American Development Bank estimated at approximately $3.8 billion annually before the current crisis, have become the primary economic lifeline for a significant share of Cuban households. They have also become a political variable: U.S. restrictions on remittance flows have at various points limited the amount Cuban-Americans can send to family on the island, a policy that inflicts economic pain on ordinary Cubans while doing little to alter the behavior of the government in Havana.
Havana’s Response
The Cuban government’s response to the crisis has followed a consistent pattern: attribute the entirety of the problem to U.S. sanctions, announce measures that fall short of the structural reforms economists say are necessary, and suppress the independent reporting and civil society organizing that might generate domestic pressure for change.
The prisoner release of 2,010 people in March was the most significant concession Havana has made in years. It did not include the journalists, independent economists, or civil society leaders whose work would be most directly relevant to managing the economic crisis.
Cuba remains one of the most restricted environments for independent media in the Western Hemisphere, a condition that limits the country’s ability to diagnose and respond to its own problems.
Reforms to the private sector — allowing small and medium-sized businesses to operate legally, which began in 2021 — have produced pockets of genuine economic activity, particularly in Havana’s restaurant and hospitality sector. But those reforms have been inconsistently applied, subject to arbitrary state interference, and insufficient in scale to offset the contraction of the state economy.
The Emigration Valve
Cuba’s most consistent economic response to crisis has been emigration. When conditions deteriorate beyond a threshold, Cubans leave — and the remittances they send back become the mechanism through which the state avoids the kind of complete economic breakdown that would force more fundamental reform.
The 700,000 who left between 2022 and 2024 represent roughly 6% of Cuba’s population — an extraordinary proportion by any measure. The communities they have built in Miami, Madrid, and across the diaspora are now the primary economic support system for the families they left behind. That dynamic has persisted across multiple generations and multiple cycles of crisis and partial recovery.
Whether the current crisis — deeper than any since the Special Period of the 1990s, when the Soviet Union’s collapse removed Cuba’s primary economic patron — produces a different outcome is the question that analysts, diaspora communities, and policymakers in Washington are all trying to answer. The new devaluation suggests Havana is still managing at the margins rather than reforming at the roots.
Sociedad Media will continue to cover Cuba’s economic situation and its implications for Miami’s Cuban community. Tips, sources, and feedback welcome at info@sociedadmedia.com
