Cuban economy to fall short of 1998 growth target

CNN November 4, 1998 Cuban economy to fall short of 1998 growth target

                  HAVANA, (Reuters) - Cuba said Tuesday its struggling economy, hit this
                  year by a five-month drought, a hurricane and a record low sugar harvest,
                  would fall short of the official 1998 growth target of between 2.5 percent
                  and 3.5 percent.

                  Vice President Carlos Lage, who oversees state economic planning, told
                  reporters at the Havana International Trade Fair that the economy would
                  have "discreet growth" in 1998 but "we estimate that we will not reach the
                  level we had planned."

                  Independent analysts have said for months that Cuba would not reach its
                  target, and would more likely register around one percent Gross Domestic
                  Product growth (GDP) this year. Lage's comments were the first public
                  acknowledgment by a senior official that the target would be missed.

Cuba's GDP growth last year was 2.5 percent, below the forecast four to
five percent, and the 7.8 percent rise reported in 1996.

                  Plunged into crisis in the early 1990s by the collapse of aid and trade ties
                  with the former Soviet Union, Cuba's economy is slowly recovering from
                  recession. But it remains hindered by the U.S. economic embargo and
                  difficulties in obtaining medium- and long-term financing.

                  A lengthy drought in eastern Cuban earlier this year, and the destructive
                  passage of Hurricane Georges in September, caused widespread damage to
                  infrastructure and agriculture. And lower world prices for sugar and nickel,
                  Cuba's principal export products, have further hampered growth.

                  Critics of President Fidel Castro's communist government say that the
                  system is also inefficient and cautious economic reforms from the early
                  1990s have not gone far enough.

                  Lage insisted that most sectors of the economy were in a healthy state,
                  especially tourism, but that the sugar failure had influenced the overall GDP
                  figures.

                  He said the 1997-98 sugar harvest was confirmed at 3.2 million metric tons
                  -- the lowest figure in half a century. Lage said nickel production this year
                  would be between 8,000 and 10,000 tons higher than 1997's output of
                  60,000 tons. Despite lower prices, there was still profit from that sector, he
                  added.