The economy of Cuba is a largely state-controlled, centrally planned economy overseen by the Cuban government, though there remains significant foreign investment and enterprise in Cuba. They’ve set policies attempting to balance the need for economic loosening along with a desire to maintain firm political control. It has slackened limited reforms setup in the 90’s to increase enterprise efficiency and curtail serious shortages of food, consumer goods, and services. Most of the means of production are owned and run by the government and most of the labor force is employed by the state. In the year 2000, the public sector employment was 76% and the private sector at 23% compared to the 1981 ratio of 91% to 8%. Capital investment is restricted and requires approval by the government. The Cuban government sets most prices and rations goods to citizens. The present Cuban Minister of Economy and Planning is Marino Murillo.

In the 1950s, Cuba's economic development was on the top of Latin America and advanced even by European standards. The economy has deteriorated, and incomes have fallen dramatically behind European countries. The combination of the loss of Soviet aid in the 90’s and domestic inefficiencies has caused the average Cuban's standard of living to fall to a minimal level. Starvation has been observed since the loss of Soviet subsidies. Although food was subsidized, shortages and lines of people waiting for goods became commonplace. Add to this situation, the problem of overcrowded housing (three quarters of it was built before 1957). Paramount of the issues has been state salaries failing to meet personal needs (wages are 17-30 U.S. dollars per month). As the variety and quantity of available rationed goods declined, Cubans increasingly turned to the black market to obtain basic food, clothing, household, and health amenities.

Corruption is common. Preferential treatment exists for those who are members of the Communist Party or who hold positions of power within the government. Access to transportation, work, housing, university education and better health care are a function of status within the government or the Communist Party.

Cuba’s GDP was $108.2 billion in 2008 which shows an increase over 2007 ($103.7B) and 2006 of $96.7 billion. That translates to a real growth rate of 4.3% in 2008. The GDP official exchange rate is $55.18 billion and the per capita GDP is $9,500.

Cuba has two currencies in circulation: the Cuban peso (CUP) and the convertible peso (CUC). Currently, .9259 CUP equals $1 US. In April 2005 the official exchange rate changed from $1 per CUC to $1.08 per CUC for both individuals and enterprises. Individuals can buy 24 Cuban pesos (CUP) for each CUC sold, or sell 25 Cuban pesos for each CUC bought. Enterprises, however, must exchange CUP and CUC at a 1:1 ratio.

The Cuban Minister of Foreign Relations, Felipe Perez Roué, stated that the circulation of the two types of currency on the island prevents citizens from acquiring basic necessities.
He said, “The dual monetary system is unjust because it makes it so that those who don’t have access to foreign currencies can not afford to buy articles of basic necessity, because the salaries have not risen to meet people’s expenses…and that it causes nutrition and housing problems amongst other things”.

This is the second occasion where a high ranking Cuban government official has recognized in public that the dual monetary system makes it hard to make ends meet.