This week, the Cuban government unveiled the draft of its State Budget for 2026, outlining a total expenditure of 550,590 million pesos (CUP).
When converted to U.S. dollars using the Central Bank of Cuba's official "floating" exchange rate (1 USD = 409 CUP), this amounts to a mere 1,346 million USD.
Vladimir Regueiro Ale, the Minister of Finance and Prices, addressed the National Assembly, stating that the budget is crafted for an economy with "limited growth," aligning with the Government's Program to "correct distortions and revitalize the economy," emphasizing fiscal discipline and the continuation of social programs.
The Complex Economic Landscape
Regueiro described the economic situation as "complex," characterized by inflationary pressures, energy constraints, increased social protection demands, the need to stimulate domestic production, and reduce imports, alongside what he referred to as the "burden" of the U.S. economic blockade.
Social Spending and Budget Allocation
The budget aims to mobilize 550,590 million CUP, marking a 6% increase from the previous year, though still a modest figure. According to the minister, approximately 70% of current expenditures are allocated to public and free services, including health, education, culture, sports, and social security.
Public Health: Allocated 76,756 million CUP (187,667 USD). This includes planning for 110,700,000 consultations in primary care, hospital admissions, prioritizing medications/reactives, and oncology services, along with maintenance and repairs.
Education: Receives 71,983 million CUP (176,000 USD). This supports universal and free access, with a total enrollment of 1,369,000 students across various levels, and 204,299 students in higher education institutions.
Social Security: Allocated 80,526 million CUP (196,000 USD), covering benefits for 1,840,000 pensioners, continuing partial pension increases, and other measures.
Social Assistance: Receives 5,981 million CUP (14,600 USD), focusing on vulnerable groups and the aging population.
Culture: Allocated 12,530 million CUP (30,600 USD), supporting institutions and programs, including 37 art schools and the University of the Arts, with about 10,000 enrolled students.
Sports: Receives 8,274 million CUP (20,200 USD), for maintaining facilities, sports schools, and community practice.
Economic Support and Infrastructure Investment
The document also highlights transfers to the business sector totaling 96,590 million CUP, significantly higher than the health budget. Of this, 54,033 million are designated for price and tariff subsidies, with 42,120 million specifically for sustaining the electricity tariff. Additionally, 2,120 million are set aside for subsidizing controlled medications.
Furthermore, 57,993 million CUP are earmarked for infrastructure projects in energy, water, health, education, tourism, and housing, with 8,600 million CUP as working capital for production-related funds.
Projected Revenues and Fiscal Deficit
For 2026, gross revenues are anticipated to reach 484,121 million CUP, with a projected GDP growth of 1% compared to 2025. The fiscal deficit is expected to be 74,500 million CUP, "a similar level" to what was estimated for the end of 2025, concentrated in capital operations.
Regueiro spoke about enhancing fiscal control, debt recovery, and combating tax evasion, with plans to update the territorial tax rate, double the amounts of taxed brackets, quintuple transportation tax amounts, and make adjustments to improve tax management, including mandatory use of NIT as a unique identifier.
Regional Financial Balance
Locally, a consolidated surplus of 9,444 million CUP is projected, concentrated in five provinces (Artemisa, Havana, Mayabeque, Matanzas, and Villa Clara), while 11 other provinces are expected to remain in deficit, although improvements are noted compared to previous balances.
Concerns Over Currency Conversion
On social media, Cuban citizens expressed concerns that, despite the seemingly large amount in Cuban pesos, the sum is negligible when converted to dollars. Amid the increasing dollarization of the economy, these figures raise alarm.
"It seems like a lot, but when converted to the official USD rate of 409 pesos, only 185,000 dollars are allocated for Health (76 million pesos), which is a paltry sum to sustain a system in crisis. The same goes for education. The question is: Where is the rest of the money?" one person wrote.
Others pointed to the structural crisis in the Cuban system, where public services show no improvement: "21% for Health, and the other day I had to look for a thermometer because the hospital didn't have a single one. I even had to buy the ampoules to lower the fever. Not to mention that recently, a 12-year-old child ended up in a vegetative state due to numerous seizures from high fever. Cubans only go to the hospital to die," another commented.
FAQs on Cuba's 2026 Budget and Economic Outlook
What is the amount of Cuba's 2026 budget in U.S. dollars?
Using the official "floating" exchange rate of 1 USD = 409 CUP, Cuba's 2026 budget amounts to approximately 1,346 million USD.
What percentage of the Cuban budget is dedicated to public services?
Around 70% of the budget's current expenditures are allocated to public services, including health, education, culture, sports, and social security.
How is the Cuban government addressing its fiscal deficit?
The government plans to strengthen fiscal control, recover debts, and combat tax evasion. They also aim to update tax rates and improve tax management to address the deficit.