Regional Report | As relations between Cuba and the United States get friendlier, the economic outlook of the island is also improving.
According to authorities in Havana, GDP expanded in the first half of 2015 at a 4.7% clip. Overall, gross domestic product in the country is expected to reach 4% this year. That’s up from 1.3% in 2014.
With the reopening in July of the US embassy in Cuba and the Cuban embassy in Washington, DC, American citizens are once again allowed to travel to the largest of the Caribbean islands, although tourism is still restricted. That’s likely to change in time. The ending of the US trade embargo is less certain. Lifting the prohibition requires congressional approval—no sure thing. But the opening of diplomatic ties between the two countries will lessen the impact of the embargo.
Elsewhere in the Caribbean, Panama continues to outperform. GDP growth consistently tops 6% each year. That looks to be the case in 2014, as well. Although work on the expansion of the Panama Canal is almost complete, a pickup in tourism should compensate for the falloff in public spending.