Cuba expects stronger growth as relations with U.S. improve
By Marc Frank
HAVANA Dec 19 (Reuters) - Cuba said on Friday its economy will grow a healthy 4 percent in 2015, apparently banking on improved diplomatic and economic relations with the United States to pull it out of years of stagnation.
President Barack Obama this week announced a deal to normalize relations with Cuba after more than a half century and a series of measures to direct money and goods to Cuba's private sector, including looser travel restrictions and allowing more remittances.
Cuba's economy minister, Marino Murillo, told the National Assembly on Friday that growth would accelerate to 4 percent in 2015 from an anemic 1.3 this year, official state media reported.
Pavel Vidal, a former Cuban central bank official, said the immediate results of renewed diplomatic relations will included increased investment and revenues.
"This sends a very favorable signal to the international community about the future of the economy, stimulates demand through tourism and increases remittances flowing to private businesses and individuals," Vidal said.
A week ago a forecast of 4 percent growth raised eyebrows but the diplomatic breakthrough, even though most U.S. sanctions remain in place, has turned it into a realistic estimate, Vidal said.
A local economist, who asked not to be identified, said growth this year was hit by a decline in revenue from strategic ally Venezuela, which has seen its own economy stagnate, and a steep fall in nickel output.
Analysts say the prospect of improved relations with the United States has lowered the perceived risk of doing business with Cuba.
"Everything has changed," one European ambassador said. "Investors will be more eager to get in before the Americans, creditors will have a bit more confidence and at every business negotiation Cuba is now in a stronger position." (Reporting by Marc Frank)
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