Cuba’s Economy Is Sliding Into Free Fall, And Daily Life Is Breaking Down

Key Points

• Power cuts of 14–20 hours a day and grid collapses affecting 10 million people are common.
• A peso reset to 410 per dollar has not restored supplies; ration cards often buy nothing.
• With Venezuelan oil down from 90,000 barrels a day to 35,000, emigration is accelerating.

Economists estimate daily electricity shortfalls around 1,500 to 2,000 megawatts, and researchers say Cuba produces about 25% less power than in 2019. Provinces can lose electricity for up to 20 hours a day; Havana goes 14 to 15 hours without light.

When power and fuel fail together, services unravel. Food spoils without refrigeration. Water pumps and transport stall. Gasoline is rationed via app-based queues booked weeks ahead.

Trash collection falters, and dengue and chikungunya outbreaks have worsened. Medicines are scarce, and families report bringing basic supplies to hospitals. The government blames the U.S. embargo and tougher sanctions, but our reporting has shown that the crisis is also rooted in domestic mismanagement, including the military conglomerate’s control over key sectors and a system of controls that stifles production.

Economists also point to domestic failures, including controls and regulations that squeeze production. President Miguel Díaz-Canel has acknowledged GDP fell more than 4% in the first three quarters of 2025, inflation jumped, and planned deliveries of rationed food were missed.

Cuba crisis deepens currency energy squeeze

The currency math is punishing. A typical pension of 3,000 pesos can be less than a 30-egg carton priced around 3,600. In December 2025, authorities introduced a “floating” official exchange rate at 410 pesos per dollar, conceding older official rates were detached from prices.

Small private firms, legalized in 2021 as MiPyMEs, have filled some shelves, but prices exclude most peso earners. External lifelines are fraying.

Venezuela’s oil shipments fell from about 90,000 barrels a day to around 35,000 by late 2025 and are estimated to cover roughly 30% of Cuba’s needs.

Cuban officials have warned that any further disruption to Venezuelan oil shipments could tighten energy further. Power cuts have sidelined nickel, and tourism remains far below its pre-pandemic peak near 4 million visitors, struggling to regain 2 million.

With protests in 2021 crushed, exit has replaced dissent. Demographers estimate about 2.75 million Cubans have left since 2020, and the real population may be near 8.25 million, not the official 9.7 million.

Related coverage: Brazil’s Morning Call | America’s Productivity Surge Is Cooling Wage Inflation Witho This is part of The Rio Times’ daily coverage of Cuba affairs and Latin American financial news.

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