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Afghanistan economy under pressure as Pakistan shocks reshape trade flows

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Afghanistan’s economy continued to face strong headwinds in late 2025 as concurrent shocks — including mass refugee returns, drought, earthquakes, and shifting regional dynamics — strained growth and weakened investment momentum, according to the latest Afghanistan Economic Monitor released by the World Bank.

The report says that while low inflation and stable revenues have supported modest economic expansion, rapid population growth driven by large-scale returns from Iran and Pakistan has outpaced job creation, limiting improvements in average household incomes.

Inflation eased slightly in September 2025, with the Consumer Price Index falling 0.4 percent month-on-month as food prices declined. Fresh and dried fruits dropped by 4.6 percent due to seasonal harvests, while small increases were recorded in vegetables and spices.

Non-food inflation rose marginally, with housing costs climbing 1.7 percent amid rising rents in Kabul and other major cities. Year-on-year inflation slowed to 2.1 percent, down from 3.1 percent in August.

The Afghani strengthened against the U.S. dollar in both monthly and annual terms, but lower domestic inflation offset much of the nominal gain. The Real Effective Exchange Rate fell 1.1 percent, helping maintain Afghanistan’s external competitiveness against its major trading partners.

Trade flows were significantly disrupted by the mid-October closure of the Durand Line crossings with Pakistan, historically Afghanistan’s largest trade corridor. Despite the disruption, exporters quickly rerouted goods through Iran and Central Asia. The trade deficit narrowed slightly to $0.88 billion, supported by a 13 percent rebound in exports to $267 million.

Food exports — now the backbone of Afghanistan’s export economy — surged, reaching $ 238million in October and rising more than 22 percent over the first seven months of FY2025. India emerged as Afghanistan’s top export destination, accounting for 50 percent of October’s shipments, while Pakistan’s share declined sharply due to crossing closures.

Imports rose 2 percent month-on-month to $1.15 billion but fell 4.5 percent year-on-year. A structural shift toward Iran and Central Asia accelerated, with Iran supplying 29 percent of Afghanistan’s total imports so far in FY2025, followed by the United Arab Emirates at 19 percent.

The report warns that Afghanistan’s increasing dependence on food exports and redirected trade routes leaves the economy vulnerable to climate shocks and further regional instability, underscoring the need for strengthened infrastructure, diversified markets, and increased investment.

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Trump administration to close Afghan evacuee camp in Qatar, sparking sharp debate

The State Department’s inspector general said an eight-month review failed to produce a definitive count of evacuees accepted under the operation.

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The U.S. government has notified Congress of its plan to shut down Camp As Sayliyah in Qatar by the end of September, a facility that temporarily houses Afghan evacuees before their transfer to the United States, according to the Washington Times.

Gregory Meeks, the top Democrat on the House Foreign Relations Committee, called the move “short-sighted” and warned that closing the camp could severely undermine U.S. efforts to relocate Afghans who assisted American forces during the two-decade conflict. Meeks described the decision as a “betrayal of Afghan allies and U.S. commitments.”

Camp As Sayliyah has functioned as a temporary processing center, where evacuees undergo security screenings before entering the U.S. According to the Afghan Evacuee Oversight Committee, roughly 800 individuals remain at the camp, including prosecutors, lawyers, female special operations personnel, and family members of U.S. military staff.

Concerns over security risks linked to the Afghan evacuation process persist. Government inspectors have highlighted challenges during the 2021 evacuations, noting that thousands of evacuees arrived in the U.S. without full identification, fueling a politically charged debate.

During a Senate hearing on Wednesday, officials revealed the difficulties of vetting Afghan evacuees. Approximately 36,000 evacuees lacked formal identification, and more than 11,000 could not provide an accurate date of birth. The State Department’s inspector general said an eight-month review failed to produce a definitive count of evacuees accepted under the operation. Meanwhile, the Department of Homeland Security’s inspector general reported that at least 77,000 Afghans entered the U.S. under the Priority Rescue Operations (PROL) program.

Democratic lawmakers expressed concern that shutting the camp could endanger Afghan allies. Senator Alex Padilla of California said, “Punishing all Afghan allies today for the actions of a few is completely unacceptable and shameful.” Democrats emphasized that security concerns should not result in abandoning those who supported the U.S., potentially exposing them to danger if returned to Afghanistan.

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Heavy rain and snowfall, flash floods imminent in parts of Afghanistan

The ministry also warned of strong winds in central provinces, particularly around the Salang passes, with speeds expected between 50 and 90 kilometers per hour.

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The Ministry of Transport and Civil Aviation has issued a warning of severe weather conditions across 18 provinces, including heavy rain, snowfall, thunderstorms, and flash floods.

In a statement shared on its X page, the ministry said that adverse weather conditions are expected Friday in the provinces of Badakhshan, Takhar, Kunduz, Baghlan, Samangan, Parwan, Balkh, Faryab, Sar-I-Pol, Jawzjan, Badghis, Herat, Farah, Ghor, Helmand, Daikundi, Uruzgan, and Bamiyan.

Rainfall is expected to range between 10 and 30 millimeters, while snowfall may reach 10 to 35 millimeters in different areas.

The ministry also warned of strong winds in central provinces, particularly around the Salang passes, with speeds expected between 50 and 90 kilometers per hour.

Authorities urged citizens to exercise caution while traveling and to take necessary safety measures to avoid accidents caused by flash floods, landslides, and snowstorms.

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Mujahid dispels claims of rifts within the Islamic Emirate

Mujahid emphasized that there is strong unity, obedience, and cohesion within the Islamic Emirate, and that there is no concern about any division.

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Zabihullah Mujahid, the spokesperson of the Islamic Emirate, has rejected a BBC report that alleged the existence of divisions among officials of the Islamic Emirate, stating that such claims are not true.

Mujahid said in a post that there are no disagreements whatsoever within the ranks of the Islamic Emirate.

He added that all affairs within the system of the Islamic Emirate are conducted in accordance with Islamic Sharia, and that there is no room for any kind of disagreement.

According to him, statements by officials about the importance of unity and solidarity, or minor issues in which views may differ, never mean the existence of disagreement.

He emphasized that there is strong unity, obedience, and cohesion within the Islamic Emirate, and that there is no concern about any division.

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