Experts to offer index of Cuba's economy
A Miami-based publication will publish a monthly measure of Cuba's economic pulse.
The Cuba Standard Economic Trend Index, compiled by a team of Cuba-born economists, will offer a monthly economic outlook on Cuba's economy "through an independent measurement".
Organisers say the CSETI will fill the "information gap" for potential investors, academics and others with an interest in Cuba's economy, for which there is little accurate information available.
The only official data on the island's gross domestic product (GDP) and economic development is released twice a year during sessions of the Cuba's National Assembly or through partial reports issued by the National Information and Statistics Institute, which are almost always months late.
The index features 28 variables, but will focus on those related to the balance of payments, which is directly correlated with the GDP. The five main categories are imports, exports, terms of trade, external funding and an additional category to measure the dependence of Cuba on Venezuela.
According to preliminary calculations, only the terms of trade has improved in 2014, due mainly to a 35 per cent rise in the price of nickel, and a four per cent rise in the price of sugar since the end of 2013. CSETI's September report estimates Cuba's economy will grow 0.8 per cent over 2014.
Calculations will be based on publicly available data, such as prices of goods and commodities in the international market, the transactions reported by Cuba's trading partners and statistics from international organisations.
"Cuba is quite a special place to do business," said Cuba Standard editor, Johannes Werner.
"In almost every country there are measurements for how the economy is doing because there is timely information available. We are putting together information through unusual channels in order to make the forecast."
Because all data used by CSETI come from outside sources - except the arrival of tourists to Cuba - they are in currencies such as US dollars or euros. That, advantageously, means Cuba's dual currency does not affect the calculations, said Pavel Vidal, who leads the CSETI's economic team. He worked for Cuba's Central Bank and now teaches at the Javeriana University in Colombia.
However, Werner said the index is less accurate than similar measures in other countries because no data can be obtained on agriculture, manufacturing or investments other than through Cuban agencies.
"We will try to overcome these gaps and make the index as reliable as possible despite the lack of information," he said.
The new index has already attracted the interest of some investors, Werner said.
Vidal explained that although some variables were not available, indirect estimates could be made from other key performance indicators which, if known, will capture "trends".
The general terms of financing that Cuba receives through foreign banks can be obtained from an analysis of the LIBOR (a benchmark rate that some of the world's leading banks charge each other for short-term loans) and the country risk rate imposed on Cuba - that is, the premium you must pay to borrow on markets - Vidal said.
But information about preferential agreements with partners such as China, Russia and Venezuela is restricted, although it is possible to know the volume of trade with these countries.
"If there are more imports than exports, one can assume that Cuba is getting some sort of financing," he said.
"Creating this index takes a fairly complex statistical process usually performed by the central banks of the countries and the Federal Reserve in the United States," Vidal said.
"The ONEI would be better at building an index like this. It has all the data but does not handle it publicly."
