Home' Trinidad and Tobago Guardian : December 17th 2015 Contents DECEMBER 17 • 2015 www.guardian.co.tt BUSINESS GUARDIAN
REGIONAL | BG19
Moody s raised its forecast for Cuban eco-
nomic growth Thursday, saying the
Caribbean island is benefitting from the
loosened US embargo and a surge in
The credit rating agency said the economy will grow about
3.5 per cent this year, sharply higher than its previous forecast
of 2.3 per cent. Next year s forecast was revised slightly higher
at 3.0 per cent.
The agency said Cuba is surviving the cut in Venezuelan
assistance, for years a crucial crutch for the economy that
included heavily discounted oil.
While the Venezuelan cutback stalled growth last year to
about a one per cent gain, "measures to diversify trade and
financial links seem to have been successful and have coincided
with a gradual easing of economic sanctions by the US," it
The US easing, which led to a reestablishment of full diplo-
matic relations between the two countries this year after a
nearly six-decade freeze, has helped fuel reforms and a 16
per cent surge in the island s tourism earnings.
If this continues, the economy will further strengthen,
Moody s said.
"Increasing permissible US participation in the Cuban
economy is likely to have a multiplier effect on economic
activity, as it could crowd in investment by non-US investors
in anticipation of increased visitor arrivals to the Caribbean
The communist-ruled nation s credit rating nevertheless
remains a very low Caa2, reflecting what Moody s called a
range of economic, legal and political risks.
But it raised the outlook to positive from stable, suggesting
a possible increase in the credit rating if things continue to
Moody s said it expects the April 2016 Communist Party
Congress will like bolster the reform process by expanding
the role of the private sector, reducing price controls, imple-
menting tax reforms and possibly beginning to reform the
clumsy dual currency system.
"There could be upward pressure on Cuba s rating if there
is a further easing of US economic sanctions that has a
material impact on Cuba s economic prospects and reform
momentum is maintained," it said.
Cuba economy boosted by
eased US sanctions: Moody's
Cuba has reached a landmark agreement with foreign creditors
over billions of dollars in unpaid debt dating back 25 years.
The Paris Club of creditor nations announced a deal Monday
under which creditors will cancel US$8.5 billion in overdue
interest payments, in exchange for a promise by Cuba to pay
off US$2.6 billion of the original debt over the next 18 years.
France, Cuba s biggest creditor, led the negotiations.
"This accord opens the way to a new era in relations between
Cuba and the international financial community," Finance
Minister Michel Sapin said in a statement.
Sapin said the deal "helps to definitively resolve the issue of
Cuba s medium-term debt ... which has not been honored since
President Raul Castro has been working to improve relations
with creditors as he tries to modernise and open up the com-
munist island s economy, which defaulted on its debts in 1986
and was devastated by the 1991 collapse of the Soviet Union.
The US maintains an economic embargo against Cuba, and
is not among the creditor nations, though President Barack
Obama and Castro have opened ties.
As part of the debt agreement, France canceled US$4 billion
in late interest payments, which made up the bulk of the money
Cuba owed. Of the remaining debt, Cuba agreed to pay US$240
million in cash to France, and US$230 million will be invested
in development projects, the Finance Ministry said.
The creditors from the Paris Club said in a statement that
they "welcomed progress made by Cuba toward the normal-
isation of its relations with creditors and the international
The group of Cuban creditors includes: Australia, Austria,
Belgium, Canada, Denmark, Finland, France, Italy, Japan, the
Netherlands, Spain, Sweden, Switzerland and Britain.
France agreed to resume its development activity in Cuba
after French President Francois Hollande visited Castro and
his brother, longtime Cuban leader Fidel Castro, earlier this
...creditors reach historic multi-billion debt deal
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