Cuba's government has announced its most far-reaching economic reforms in years, opening more sectors to private investment, allowing businesses to import and export without state intermediaries, and offering diaspora Cubans the same conditions as foreign investors. President Miguel Díaz-Canel unveiled the package on 12 June, and key elements were fast-tracked for approval by the National Assembly within a week. In a sign of the reforms' political weight, the Communist Party's politburo held an extraordinary plenary session, at which a letter from former president Raúl Castro — who led Cuba from 2006 to 2018 and remains a powerful figure — was read aloud expressing his backing for measures he called "the most beneficial to the revolution at this time."

The package goes further than previous liberalisation efforts. Private Cuban companies will now be able to hold controlling stakes in hotels without mandatory state participation — something previously barred — and will be able to trade internationally on their own account. The state's rationing booklet, the libreta, a longstanding symbol of Cuba's socialist egalitarianism that entitles every citizen to subsidised staples such as rice, eggs, oil and coffee, is set to be restricted to the poorest households. The government also announced plans to reduce the number of ministries and public servants, though Prime Minister Manuel Marrero stressed that the changes "in no way imply relinquishing the social responsibility of the state."

The backdrop to these reforms is an economy in acute distress. Cuba's GDP has contracted by roughly 15% since 2020, battered by successive shocks: the collapse of Venezuelan oil subsidies from 2016, the Covid-19 pandemic, and successive rounds of US sanctions. Since January 2026, when President Donald Trump tightened an effective oil blockade, no petroleum tankers have docked in Cuba apart from one Russian vessel in late March. The fuel crisis has caused power cuts lasting more than 30 hours, paralysed rubbish collection, and exacerbated shortages of food, drinking water and medicine. A state-run news site reported that the survival rate for children with cancer had fallen from 85% to 65% since January.

The tourism sector, historically a vital source of hard currency, has been particularly hard hit. Fewer than 360,000 foreign visitors arrived in the first five months of 2026, a fall of 58.4% on the same period last year. Air Canada has suspended its Cuba flights indefinitely, a significant blow given that Canadians were the island's largest group of tourists. Spanish hotel chains Meliá and Iberostar also halted operations at multiple properties ahead of a US deadline requiring companies to stop doing business with Gaesa, the Cuban military's commercial conglomerate.

Economists are cautious about the reforms' prospects. While the measures represent a genuine deepening of Cuba's gradual market opening — a process dating back in fits and starts to 1976 — analysts note that as long as US sanctions remain in place, it will be difficult for the changes to translate into real economic improvement. It is also unclear whether the reforms will go far enough to satisfy the Trump administration, which has been pushing for a fundamental change to Cuba's economic model. Cuba's government, for its part, appears to be betting that demonstrating domestic reform can help it in ongoing negotiations with Washington, while laying the groundwork for a faster recovery should sanctions eventually ease.