WASHINGTON—Almost exactly five years ago, thousands of Cubans, fed up with soaring inflation and severe shortages of basic goods, took to the streets in protest against the communist regime that had crippled the Cuban economy. Today, Cuba is once again in international headlines as the island’s economic collapse accelerates. While protests so far have been scattered, speculation is growing that the regime could soon face its most existential crisis in decades. The island has exhausted its fuel reserves and electricity is intermittent at best. This week, Cuba suffered a nationwide blackout.
Outside of Cuba, much of the media attention and commentary about the crisis has focused on recent economic factors. But this risks echoing Havana’s preferred explanation that outside pressure, and not decades of communism, is to blame. The collapse of the island’s tourism sector, the closure of dozens of hotels, the reduction of flights to and from the island, and other negative outcomes are a result of the disastrously run state-led economy. The recent US measures imposed on Cuba have an effect, but treating this situation as a sudden, unexpected, and external shock misses the broader, more alarming reality. The island has long been collapsing under the weight of a communist dictatorship that has spent decades decapitalizing its economy and undermining the engines of the country’s prosperity. Economic changes at the margins will not improve Cubans’ future.
This edition of Economic Pulse of the Americas explores recent data tracking Cuba’s collapse and demonstrates why the roots of this crisis run deep.
An island in free fall
In April, the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) projected that the island’s economy would shrink by 6.5 percent in 2026. This projection is significantly worse than the October 2025 projection of practically zero growth. The pressure is mounting, but the economy’s collapse precedes the recent pressure campaign. Another projection, from the Economist Intelligence Unit, further downgraded the outlook to a 7.2 percent drop in total output for this year.
To look at only this data gives an incomplete picture. To begin with, even though ECLAC conducts its own independent assessment, its projections are based on official statistics from the Cuban government, presenting a credibility issue. But even more important, the two-year window is too narrow a snapshot of the Cuban economy’s problems.
Perhaps nowhere is Cuba’s full economic collapse more visible than in the tourism sector. While the broader Caribbean has enjoyed a strong recovery since the COVID-19 pandemic, Cuba has decoupled entirely from this regional growth. Data from Cuba’s National Office of Statistics and Information (ONEI), which, as mentioned, has its challenges with reliability, reveals that international visitor arrivals have plummeted to twenty-year lows. Faced with fuel shortages and systemic blackouts in Cuba, major carriers have slashed flight frequencies, causing bookings to crater. The structural rot has advanced so deeply that international hotel chains have begun terminating management contracts and closing major resorts. The state-backed military conglomerate Grupo de Administración Empresarial S.A., or GAESA, has consolidated remaining guests into a handful of operational properties to conserve generator fuel.
Because Havana’s official statistics are unreliable, alternative sources of economic data are essential to get a fuller picture of what is happening on the island. Take international trade. As the graph below shows, satellite ship-tracking data from the International Monetary Fund (IMF) shows that, as of May 2026, Cuba’s detected monthly arrivals and departures of shipping vessels have dropped by 75 percent since 2019. In contrast, shipping volumes for Latin America and the Caribbean region as a whole have increased by more than 15 percent over the same period. The trajectory of the data shows that this collapse is not simply the result of the energy sanctions and other pressure measures imposed after the removal of Venezuelan dictator Nicolás Maduro. Rather, the past six years have experienced a persistent decline in arrivals and departures.
The collapse in trade volumes also tracks with the destruction of the island’s sugar industry, a longstanding engine of exports, which has effectively been brought to a standstill. The demise of this sector has also deprived the broader economy of a vital source of foreign currency via exports to cover key import needs, such as fuel.
Going back to shipping volumes, the collapse of trade closely mirrors the trendline observed through satellite imagery. Although no official numbers are available yet for 2026, World Trade Organization (WTO) data shows that between 2015 and 2025, the real volume of Cuba’s imports fell by almost two-thirds, while its exports collapsed by half.
Internal production indicators also reveal the hollowing out of Cuba’s productive sectors. Cuban cement production—a proxy for the construction industry and for the level of capital investment in public infrastructure and private development—has declined in recent years, according to US Geological Survey data. Moreover, recent market updates indicate that with more frequent blackouts, the cement industry is essentially paralyzed today.
This data challenges the notion that Cuba’s current economic spiral is the result of the US blockade and additional sanctions imposed since January of this year. While the implementation of Washington’s energy pressure campaign and the sudden evaporation of Venezuelan oil subsidies in early 2026 have undeniably served as acute shocks, they did not create the crisis. They merely exposed a disaster years in the making.
One of the most lasting impacts that the regime has had on Cuba’s economy is the aging of its population. This is a consequence of the constant emigration of the country’s youngest and most productive people, who have fled both persecution and limited economic opportunities. Consequently, the island has a median age of around forty-two, higher than the average across all World Bank income groups, including high-income countries, whose populations tend to be the eldest.
Cuba’s aging is a direct result of the hollowing out of the country’s young population, as opposed to the natural aging typically seen in higher income societies. The effects of this unnatural demographic shift will be felt for decades, with slower growth, a shrinking population and workforce, and a growing dependency ratio that will put increased pressure on any future fiscal regime in the island. Remittances, which present a countering effect on the loss of domestic consumers due to migration, peaked long before the pandemic, according to United Nations data, presenting a limited revenue stream for an economy that has ejected millions of people through the decades.
This article is part of “Economic Pulse of the Americas,” a series of explainers about the overlooked economic and trade trends in Latin America and the Caribbean, written by the Atlantic Council’s Adrienne Arsht Latin America Center. To get notified about future editions and other related work on the region, sign up here.