Business
World Banks says Afghanistan’s economy adjusting to new realities
The World Bank said in it’s latest Afghanistan Development Update report that the country’s economy is adjusting to a “new normal” following the collapse of the former government and take over by the Islamic Emirate of Afghanistan (IEA).
According to the report, a sharp decline in public spending, lower household incomes, and reduced consumption caused aggregate demand to fall, while disruptions in the payment system and supply constraints further hampered private sector activities, initially forcing many businesses to close or scale down their operations.
The report noted that preliminary statistics on the gross domestic product (GDP) show that the economy contracted by about 20 percent in 2021.
However, the resumption of off-budget international support for humanitarian needs and basic services helped mitigate some of the negative impacts over the past year.
The report concludes that Afghanistan’s economy is now much smaller than before after contracting significantly. The economy has now reached a point where it is likely to plateau.
The World Bank stated that while inflation remains high, some indicators have improved: exports have increased, exchange-rate volatility has reduced, and domestic revenue collection is relatively healthy.
In addition, private businesses are adjusting to the new operating environment.
“While there are signs of economic stabilization and resilience of Afghan businesses, the country continues to face enormous social and economic challenges that are impacting heavily on the welfare of the Afghan people, especially women, girls, and minorities,” said Melinda Good, World Bank Country Director for Afghanistan.
“Living conditions showed slight improvements in the past few months, but deprivation remains very high across the country, and persistent inflation might further erode any welfare gains,” she added.
The report projects that the real GDP in 2022 will contract further, with an accumulated contraction of close to 30-35 percent between 2021 and 2022.
“A range of economic and political scenarios is possible for Afghanistan’s future. While all scenarios depend on continued off-budget aid from the international community, a more upside and sustainable trajectory requires actions by the interim Taliban (IEA) administration to unlock much-needed economic integration and domestic opportunities for the private sector to create jobs for the Afghan people,” added Good.
Business
Afghanistan raises import tariffs on several goods to support domestic industry
Under the new rates, the customs tariff on bottles has increased from 12% to 16%, while the tariff on construction paint has risen from 16% to 30%.
Afghanistan’s Ministry of Finance says it has increased customs tariffs on several imported goods as part of measures aimed at supporting domestic production and industrial growth.
The ministry said the Tariff Committee approved the changes during its third meeting of the 1405 solar year.
Under the new rates, the customs tariff on bottles has increased from 12% to 16%, while the tariff on construction paint has risen from 16% to 30%.
Tariffs on leather footwear and plaster have each increased from 50% to 80%, while the rate on sanitary diapers has risen from 20% to 25%.
At the same time, the tariff on heart springs has been reduced from 8% to 3.5%.
The Ministry of Finance said customs tariffs on cement, iron pipes, refrigerators and raw materials used in carpet production are also under review.
According to the ministry, the tariff adjustments are intended to protect domestic industries, strengthen local production and create conditions for further growth in trade.
Business
Afghanistan-Kazakhstan trade reaches $581 million in six months
The latest discussions come as Kabul and Astana work on a bilateral economic cooperation roadmap, with the two countries aiming to increase annual trade to $3 billion.
Trade between Afghanistan and Kazakhstan reached $581 million in the past six months, officials in Afghanistan’s western Herat province said.
The figure was discussed during a meeting between Herat Governor Noor Ahmad Islam Jar and a Kazakh delegation led by Yerkin Tukumov, Kazakhstan’s special representative for Afghanistan.
Tukumov stressed the need to expand transit capacity and remove customs barriers to facilitate increased trade between the two countries. He also invited Afghan officials to attend a joint economic meeting scheduled to take place in Kazakhstan.
Islam Jar highlighted Herat’s strategic location and security, describing the province as having significant potential to serve as a hub for investment and regional trade.
Afghanistan and Kazakhstan have previously discussed expanding trade in agricultural products, including Afghan agricultural exports in exchange for flour imports from Kazakhstan.
The two sides have also reached understandings on cooperation over the Torghundi-Herat railway project, which is intended to strengthen transport and trade links.
The latest discussions come as Kabul and Astana work on a bilateral economic cooperation roadmap, with the two countries aiming to increase annual trade to $3 billion.
Business
Ariana Afghan Airlines increases Kabul-Delhi cargo flights
Ariana Afghan Airlines has increased cargo flights between Kabul and Delhi to facilitate the transportation of commercial goods and support Afghan traders.
In a statement issued Saturday, the airline said it will now operate two scheduled cargo flights daily on the Kabul-Delhi route, up from one flight per day previously.
The airline said Afghan traders and commercial companies can use the daily cargo services to transport their goods quickly, safely and reliably between Afghanistan and India.
Ariana Afghan Airlines said it is working to further expand and improve its air cargo services to support trade, meet the needs of Afghan traders and facilitate Afghanistan’s exports and imports.
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