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Sharp drop in exports to Afghanistan drives Pakistan’s trade deficit surge

Meanwhile, Afghanistan is actively seeking alternative trade routes and partnerships to reduce future reliance on Pakistan’s commercial channels and strengthen its economic independence.

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Pakistan trade

Recent data from Pakistan’s central bank reveals that a sharp decline in exports to Afghanistan has become a key factor behind the country’s growing trade deficit, challenging previous claims by Pakistani officials that halting trade with Afghanistan would not harm their economy.

According to the State Bank of Pakistan, the trade deficit with nine neighboring countries increased by more than 39 percent in the first five months of the 2025–2026 fiscal year, rising from $4.4 billion to $6.2 billion. The report highlights that reduced exports to countries such as China and Afghanistan played a central role in this increase.

Exports from Pakistan to Afghanistan fell dramatically by over 94 percent during this period, dropping from $408 million last year to approximately $210 million. Economic analysts note that Afghanistan has historically been one of Pakistan’s key export markets, particularly for food items, cement, medicine, and daily-use goods—products that cannot be easily replaced.

The steep decline follows the complete suspension of trade between the two countries in October 2025. Despite previous statements by Pakistani officials asserting that reduced or halted trade with Afghanistan would not negatively impact Pakistan’s economy, the latest figures suggest otherwise.

Meanwhile, Afghanistan is actively seeking alternative trade routes and partnerships to reduce future reliance on Pakistan’s commercial channels and strengthen its economic independence.

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Etihad Airways to launch twice-daily Kabul flights from July

The expansion marks the second increase in service since the UAE national carrier launched flights to the Afghan capital in March 2026.

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Etihad Airways will increase its flights between Abu Dhabi and Kabul to twice daily from July 15, citing strong demand for travel on the route.

The expansion marks the second increase in service since the UAE national carrier launched flights to the Afghan capital in March 2026.

Etihad initially began operating four flights per week to Kabul, but growing passenger demand has prompted the airline to significantly expand capacity on the route.

“The response to our Kabul launch has been exceptional,” said Arik De, Etihad’s Chief Revenue and Commercial Officer. “Demand has remained strong from day one, and moving to double-daily is a direct reflection of what our guests have been telling us with their bookings.”

The route is operated using Airbus A320 aircraft, configured with eight Business Class seats and 150 Economy Class seats.

The additional flights are expected to provide passengers with greater flexibility and improved connections through Abu Dhabi’s Zayed International Airport to destinations across Europe, the Middle East and other international markets.

The increase also reflects the close links between Afghanistan and the United Arab Emirates, which is home to a large Afghan community and serves as an important hub for business, trade and family travel.

Under the new schedule, Etihad will operate two daily services in each direction.

The first flight, EY312, will depart Abu Dhabi at 9:55 a.m. and arrive in Kabul at 1:25 p.m., with the return flight, EY313, leaving Kabul at 3:10 p.m. and arriving in Abu Dhabi at 6:00 p.m.

The second daily service, EY310, will depart Abu Dhabi at 2:45 p.m. and arrive in Kabul at 6:15 p.m., while EY311 will leave Kabul at 7:20 p.m. and land in Abu Dhabi at 10:10 p.m.

Etihad said the expanded schedule will offer travelers more convenient departure options and strengthen connectivity between Afghanistan and the airline’s global network.

The move also underscores Abu Dhabi’s growing role as a regional aviation hub and highlights increasing demand for air travel between the UAE and Afghanistan.

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ACCI chairman holds talks with U.S. and Russian representatives to boost trade and investment

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The Chairman of the Afghanistan Chamber of Commerce and Investment (ACCI), Sayed Karim Hashemi, held separate meetings with Jeffrey Grieco, Chairman of the Afghanistan-American Joint Chamber of Commerce (AACC), and Dmitry Zhirnov, Russia’s ambassador to Afghanistan, to discuss expanding trade, investment, and economic cooperation.

During his meeting with Grieco at ACCI headquarters, Hashemi emphasized the importance of strengthening economic and commercial ties between the private sectors of Afghanistan and the United States. He called for greater cooperation to connect Afghan businesses with American companies and investors, including Afghan-Americans, and highlighted opportunities for increasing Afghan exports to the U.S. market.

Hashemi also stressed the need for direct engagement between companies, traders, and investors from both countries, as well as cooperation in technology transfer, management expertise, and support for entrepreneurs and small and medium-sized enterprises. He further called for efforts to facilitate the release of Afghanistan’s frozen assets, describing them as belonging to the Afghan people.

Grieco reaffirmed the Afghanistan-American Joint Chamber of Commerce’s commitment to working closely with ACCI and noted that several American companies have expressed interest in investing in Afghanistan’s mining sector. He also invited Hashemi to meet a large delegation of American traders and investors expected to attend an upcoming economic event in Uzbekistan, where Afghanistan’s investment opportunities could be presented.

In a separate meeting, Hashemi met with Russian Ambassador Dmitry Zhirnov and discussed ways to strengthen trade and investment relations between Afghanistan and Russia. The discussions focused on expanding commercial ties, exchanging trade delegations, attracting joint investments, and creating stronger links between the private sectors of the two countries.

Hashemi called for the deployment of Russian specialists to assist Afghanistan’s private sector and support the transfer of technical knowledge and industrial expertise. He also proposed enhancing cooperation between the chambers of commerce of both countries and exchanging lists of active traders, investors, and companies to develop practical market-driven initiatives for economic cooperation.

For his part, Ambassador Zhirnov said trade between Afghanistan and Russia had shown positive growth over the past year but remained below its full potential. He stressed the need for greater efforts to increase bilateral trade and promote practical economic cooperation.

The Russian envoy also pledged to support ACCI’s efforts at international conferences and forums by promoting Afghanistan’s investment opportunities and major economic projects to Russian businesses and investors. He emphasized that stronger ties between the private sectors of the two countries would play a key role in expanding broader economic relations between Afghanistan and Russia.

The meetings reflect ACCI’s ongoing efforts to attract foreign investment, expand international trade partnerships, and strengthen Afghanistan’s economic engagement with both regional and global partners.

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Afghan banks to finance Herat–Mazar railway project

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Afghanistan’s central bank has announced that commercial banks will participate in financing the planned Herat–Mazar-e-Sharif railway project, a major infrastructure initiative estimated to cost nearly 55 billion afghanis ($780 million).

The announcement came during a joint meeting between officials from Da Afghanistan Bank, the Ministry of Finance and representatives of commercial banks, chaired by First Deputy Governor of Da Afghanistan Bank, Sediqullah Khalid.

According to the central bank, a financing mechanism for national development projects has recently been finalized in coordination with the Economic Deputy Office of the Prime Minister and the Ministry of Finance, creating a framework for commercial banks to invest directly in large-scale infrastructure projects.

Khalid said the banking sector could play a significant role in strengthening the national economy and accelerating the implementation of development projects through domestic investment.

He noted that discussions during the meeting focused on the Herat–Mazar-e-Sharif railway project, which is expected to stretch 657 kilometers across Afghanistan. The project is intended to boost economic growth, expand trade links and improve regional connectivity.

Khalid also said improved security conditions in the country have created a favorable environment for implementing major infrastructure projects, adding that the central bank would provide the necessary support and facilities to encourage private-sector participation.

Representatives of commercial banks expressed readiness to invest in the railway project, describing participation in national development initiatives as both an opportunity and a responsibility to contribute to Afghanistan’s economic growth.

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