In-depth country-focused analysis on Cuba's economic, political and operational risk environment, complemented by detailed sector insight


Our comprehensive assessment of Cuba's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Cuba, as well as the latest industry developments that could impact Cuba's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Cuba before your competitors.

Country Risk

Cuba Country Risk

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Core Views

  • Bermuda's prolonged recession continued into 2014, and we now expect this economic contraction to continue over the coming years. We expect that an international crackdown on offshore financial centres such as Bermuda will lead to a decline in financial services activity, one of the key contributors to the island's economy. Although tourism will rise, it will not be enough to offset tempered insurance activities.

  • Bermuda's current account will remain in surplus over the course of our 10-year forecast period, though the surplus will decrease to 10.4% of GDP by 2024, down from 17.4% in 2014, in line with our projections for slowing exports of tourism services and secular decline in off-shore finance.

  • Despite poor growth prospects, Bermuda will remain politically stable over the next 10 years owing to the...

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Cuba Country Risk

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Core Views:

  • A gradually improving tourism sector and strong private consumption growth will drive robust real GDP growth rates in the Dominican Republic in the coming years.

  • Puerto Rico to remain in a recession through 2015 amid high unemployment and weak investment, and see a high likelihood of additional defaults following the missed debt servicing payment by the Public Finance Corporation.

  • Reforms in Cuba are headed in a positive direction, and investor interest is on the rise, however the country's transition towards a more market-oriented economy will be slow, as illustrated by the incremental steps towards abolishing the dual exchange rate regime.

Major Forecast Changes:

  • Slumping precious metals production in an environment of low...

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Cuba Industry Coverage (4)

Medical Devices

Cuba Medical Devices

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BMI View: We forecast that the small Cuban market will register moderate growth of 7.6% over the forecast period, supported by stronger economic growth. The market will rely on imports from mainly Europe and China, and increasingly from Japan. US suppliers cannot compete due to the US economic embargo but opportunities will exist in a post-embargo era. Opportunities remain for other foreign companies, particularly from the fellow communist China.

Projected Medical Device Market, 2014-2019

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Pharmaceuticals & Healthcare

Cuba Pharmaceuticals & Healthcare

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BMI View: The special development zone will allow Cuba to have greater openness in parts of its state without the danger of risking its entire system under the 'threat' of the free-market. The Chinese style (more free market-oriented and flexible) governmental measures in the special development zone will provide significant investment opportunities for pharmaceutical companies.

Headline Expenditure Projections

  • Pharmaceuticals: CUP1.51bn (USD1.51bn) in 2015 to CUP1.61bn (USD1.61bn) in 2016; +6.5% in local currency terms and US dollar terms. Forecasts have been maintained from Q116.

  • ...

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Cuba Telecommunications

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BMI View: Digicel's eventual initial public offering (IPO) plans bode well for the future of the Caribbean regional telecommunications market as additional funds raised in the initial stock offering will allow investment into next-generational networks and help expand the market further. While IPO plans are presently on hold at the eleventh hour, it also demonstrates the saturated nature of the telecoms industry in the Caribbean, with revenue and subscriber growth flattening. A key downside risk is the company's exposure to weak consumer spending trends in its core markets, an issue that could undermine investor confidence further down the line. Haiti and Cuba represent the largest organic growth opportunities in the region, as both are...

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Cuba Tourism

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BMI View: Arrivals growth in the Caribbean will pick up to 2.7% in 2016, reflecting improved visitor numbers from Europe and North America. The Dominican Republic, St Eustatius and Cuba are expecting the highest rate of arrivals growth, but all tourism markets will experience growth in 2016.

We hold a positive outlook on the Caribbean tourism market in 2016, with growth of 2.7% marking an improvement after the lower growth rate of 1.7% in 2015. This arrivals growth is led by strong arrivals from North America and particularly from Europe. European arrivals declined in 2015 and a return to growth in 2016 will bring benefits in terms of tourist expenditure, as well as encouraging more longer-term investment. Moreover, the rebound in European tourism to the Caribbean underlines the resilience of the region's market, which remains a highly popular destination despite its relative expense....

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