Cuba’s Economic Crisis: Blackouts, Water Cuts, and Garbage Piles Amid Recession and Stagflation

Under the intense Caribbean sun, the overpowering stench of garbage permeates a street in Havana, far removed from the city’s tourist hub. The accumulated waste has caused traffic disruptions due to infrequent waste collection services, a stark manifestation of Cuba’s economic downturn over the past year.

This decline, marked by power outages and water shortages, is the result of an ongoing energy crisis that has plagued the island for quite some time. Authorities have acknowledged the crisis but have yet to offer substantial solutions.

According to official figures, Cuba’s economy contracted by 1.1% in 2024, with the United Nations’ Economic Commission for Latin America and the Caribbean (ECLAC) predicting a further contraction of 1.5% this year. Inflation remains above double digits, contributing to the nation’s economic woes.

“We are in a recession, a rather complicated situation,” says Everleny Pérez Villanueva, an economist and researcher who once led the Center for Cuban Economic Studies at the University of Havana. In his hometown, where traffic lights have gone dark and high-speed zones pose challenges, he describes the city’s waste management system as chaotic.

Power outages, a common occurrence in some localities, last up to 20 hours, crippling the productive sector. Lázaro Hernández, a 38-year-old photographer who works with tourists in Havana, notes that these outages affect everyone, forcing him and others to adapt their schedules.

Despite the challenges, tour guides like Jorge Pérez continue to showcase Cuba’s beauty to visitors. However, the energy crisis has made the tourist experience less appealing compared to other destinations, leading some travelers to reconsider visiting the country again.

For years, the energy system has suffered from a lack of maintenance and investment, a problem that worsened during last year’s hurricane season. The resulting collapses have led to street protests, with residents recently blocking streets in Havana to protest the lack of drinking water.

Cuba is experiencing a situation of stagflation, according to economist Mauricio De Miranda Parrondo from Pontificia Universidad Javeriana in Colombia. With a collapsed productive sector, the country struggles to meet basic needs, particularly with regards to food and fuel supplies. The reduction in oil supply from Venezuela, once Cuba’s major provider, has further complicated matters.

The energy crisis also affects internet access, which has expanded discontent and facilitated protests. In June, students from the University of Havana demanded a rollback of data navigation package price hikes, a demand acknowledged by the government but not fully addressed.

Tourism, once a significant contributor to Cuba’s economy, has been affected as well. Hotels continue to attract visitors with electric generators, while restaurants and bars struggle to stay open at night due to power outages. These conditions deter tourists and lead many to avoid returning to the country.

Between January and July of this year, Cuba received almost 1.58 million visitors, a decrease of 17% compared to the same period in 2024. The tourism sector has suffered greatly, with hotels experiencing an occupancy rate of just 24% during the first quarter – a “very poor” result, according to Economy Minister Joaquín Alonso Vázquez.

In addition to its role as a tourist attraction, Cuba was once a leading sugar producer. However, the 2024/2025 harvest yielded just 150,000 tons – less than half of the previous year’s total. “The harvest was a symbol, and now sugar production practically no longer exists,” summarizes economist Pérez.

Food shortages have also become commonplace, affecting many Cubans, particularly retirees and those earning minimum wage. The availability of subsidized food has decreased in recent months, leaving pensioners to cope with limited resources.

“The bare minimum of goods that guaranteed a certain social equality is no longer respected,” Pérez Villanueva says. “In the neighborhood where I live, they gave chicken once a month. Now, it’s been eight months since they have.”

The Cuban government, historically, has attributed economic difficulties to the United States embargo and restrictions imposed by President Trump’s administration. However, internal issues remain unresolved, according to experts like De Miranda. The current government, he says, “has not been able to present a credible strategy for overcoming the crisis.”

The migratory exodus has risen in recent times, causing the population to fall below 10 million inhabitants for the fourth consecutive year, according to official figures.