Cuba says economy grew 6 percent in first half

HAVANA - Cuba's economy grew by 6 percent in the first half of 2008, but won't maintain that pace because of damage caused by Hurricanes Gustav and Ike, official media reported Saturday.

Economy Minister Jose Luis Rodriguez said the rise in gross domestic product in the year's final six months "won't match the results of the first, which finished with 6 percent" growth, according to the Communist Party newspaper Granma.

Hurricane Gustav hit western Cuba on Aug. 30 and Ike slammed into the country's eastern flank barely a week later, then raked most of the island. The government said that the storms caused the greatest storm damage in Cuba's hurricane-battered history, killing seven people, damaging nearly 450,000 homes and crippling food production and infrastructure.

"The principal challenge at this time is the reconstruction of the country, whose losses were initially calculated at $5 billion but which today we calculate will be far more than that," Rodriguez said.

He offered no new estimates, but Civil Defense Chief Ramon Pardo Guerra told visiting Brazilian President Luiz Inacio Lula da Silva on Friday that collective damage from the storms had reached nearly 8.7 billion convertible pesos, or about $9.4 billion, making them nearly twice as costly as officials originally believed. Pardo Guerra's comments were reported on state television Saturday.

Cuba's measurement of GDP includes spending on free health care, education through college and monthly food rations provided by the communist system — an uncommon methodology that critics say inflates growth figures. Officially, the economy expanded by 7.5 percent last year and posted a 12.5 percent growth rate in 2006.

Rodriguez projected last year that the economy would grow 8 percent in 2008, but he and other officials began warning in July, even before the hurricanes hit, that rising global food and oil prices would cause "inevitable adjustments and restrictions."

Rodriguez told Granma that Cuba's top priority is increasing agricultural production since the government spends nearly $2 billion per year to import food, much of it from the United States.

Washington's trade embargo prevents American tourists from visiting Cuba and bans most trade between the two countries, but has allowed sales of food and farm products since 2000, and the United States has become the island's top source of agricultural products.

The economy minister said Cuba is watching Tuesday's presidential election in the United States, but that its government "is certain there will not be change in Washington, whoever wins."

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