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Cuba Country Risk Report Q3 2018

Cuba Country Risk Report Q3 2018

The Cuban economy holds immense potential given the island's size and proximity to the US market. However, investment and growth will depend on political dynamics in both Cuba and the US.

While US-Cuba relations will remain strained following President Donald Trump's decision to partially restrict travel and investment on the island, we do not expect relations will deteriorate further.

The US embargo will remain in place in the coming years, due to the Republican Party's dominance of the US Congress, capping potential investment into the island.

Falling support from Venezuela will undermine Cuba's growth in the short term, by forcing Cuba to rely on more expensive fuel imports from other sources.


Executive Summary
Core Views
Key Risks
Chapter 1: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Growth Outlook
Positive Growth In 2018, Though Upside Limited
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Outlook On External Position
TABLE: IMPORTS FAR OUTWEIGHING EXPORTS
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
Currency Forecast
Currency Unification Still Likely In 2018
Chapter 2: 10-Year Forecast
The Cuban Economy To 2027
Reforms To Underpin Steady Economic Growth
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 3: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
New President Not A Gamechanger
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Mounting Uncertainty Will Not Undermine Political Stability
Chapter 4: BMI Global Macro Outlook
Signs Of Weakness, But Global Expansion Broadening
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: CUBA – MACROECONOMIC DATA & FORECASTS

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