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This page shows a list of countries with some data from them, one of them being the "local purchasing power index".

Cuba is in the last position of this with a 1.28 in purchasing power compared to the 102.77 of Switzerland.

Cuba's local purchasing index power is the lowest one with difference, being even way lower that countries that are considered very poor, and therefore, have a very low local purchasing index. For example Syria has more than 5 times the local purchasing power of Cuba.

Is Cuba's local purchasing index really that low?

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    The site is slightly vague about its methodology (despite claiming to be more open than others), but I suspect the definition of the indexes is biasing them against Cuba's planned economy and high level of state provision of services.
    – IMSoP
    Jul 25 at 12:35
  • @IMSop, you had linked the ranking of cities, I changed it to english version of ranking of countries. Jul 25 at 12:56
  • They put Lebanon in the middle by local purchasing power, 70/139. That has serious problems in that area. I think it is unreliable.
    – Dave
    Jul 25 at 17:57
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The clue here is that Cuba does not appear at the bottom when you sort by other indexes on that page. On the "Cost of Living Index", it shows at #44 out of 139, just below Spain, and above Portugal; on the "Rent Index" at #61; on the "Groceries Index" at #51; and on "Restaurant Price Index" at #69.

So what's throwing it down to #139 on the "Local Purchasing Power Index"? The explanations of indices describes that index as this:

Local Purchasing Power shows relative purchasing power in buying goods and services in a given city for the average net salary in that city. If domestic purchasing power is 40, this means that the inhabitants of that city with an average salary can afford to buy on an average 60% less goods and services than New York City residents with an average salary.

More specifically, the Methodology page shows that it is calculated as:

(Average_Disposable_Salary(This_City) / BasketConsumerPlusRent(This_City))

We can see the "BasketConsumerPlusRent" calculation in the "Cost of Living Plus Rent" column of the page we were initially looking at. It gives a value of 37.31 - low compared to their New York City benchmark, but solidly in the top half of the list at #48. So the problem must be in the salary figure.

If we look at the page on Cost of Living in Cuba we can see this clearly:

Average Monthly Net Salary (After Tax): $31.22

In comparison Portugal, which had a similar Cost of Living value, is listed as $983.24!

So are Cubans really paying European prices on less than 5% of their salary? Not really. As explained in this NBC news article from 2019, Cuba has two parallel currencies, one used for anything deemed "essential" and the other for international trade and "luxuries":

Under Cuba's byzantine pricing system, an average water bill denominated in Cuban pesos will be a few dollars, for example, while home internet billed in the stronger convertible peso can cost hundreds of dollars a month.

So what seems to be happening is that Numbeo is comparing the cost of maintaining a Western lifestyle (their basket of goods includes "1 Pair of Nike Running Shoes (Mid-Range)" and "Internet (60 Mbps or More, Unlimited Data, Cable/ADSL)") against a flat salary figure used mostly for buying state subsidised essentials. The real "purchasing power" in Cuba's complex mixed-socialist economy is probably hard to summarise in a single number.

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