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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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Pakistan’s Achakzai pushes for Afghanistan dialogue amid economic strain

Despite tensions, Achakzai noted that Afghanistan remains heavily reliant on Pakistani imports, warning that Islamabad’s policies have undermined its own economic interests.

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Pakistani opposition leader Mahmood Khan Achakzai has called for renewed dialogue with Afghanistan, warning that strained relations and policy missteps are worsening Pakistan’s economic challenges.

Speaking on regional ties, Achakzai said communities from Chaman to Khyber share deep historical and economic links that cannot be ignored, stressing the need to restore engagement with Kabul.

He argued that Pakistan’s current economic difficulties are rooted in “wrong state policies,” claiming that Afghanistan was once a key export market for Pakistani goods but has been lost due to prolonged political tensions.

According to Achakzai, restrictions on bilateral trade have driven up unemployment in Pashtun and Baloch regions, hitting small traders in areas such as Khyber, Chaman, and Nushki who depend on daily commerce. He added that farmers in Punjab are also facing losses, with disrupted markets forcing many to discard produce.

Despite tensions, Achakzai noted that Afghanistan remains heavily reliant on Pakistani imports, warning that Islamabad’s policies have undermined its own economic interests.

He also called for firm action against drug trafficking and weapons smuggling, while describing the impact of trade disruptions on daily wage earners as “deeply regrettable.”

Achakzai urged Pakistan’s leadership to pursue practical solutions through dialogue and policy reform to address both economic pressures and regional instability.

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UNICEF report highlights progress and ongoing challenges for Afghan children

In addition, around 10 million children and mothers benefited from essential nutrition services and supplies aimed at preventing malnutrition.

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UNICEF Afghanistan Annual Report 2025 has outlined significant gains in support for children and families, while warning that serious challenges persist across the country.

According to the report, more than 20 million people — including 5.6 million children — accessed primary healthcare services through UNICEF-supported facilities over the past year.

In addition, around 10 million children and mothers benefited from essential nutrition services and supplies aimed at preventing malnutrition.

Education support also remained a key focus, with four million children receiving teaching and learning materials across schools, community-based programmes, and emergency settings.

Meanwhile, 2.7 million people were provided with emergency water, sanitation, and hygiene (WASH) services.

UNICEF said the results reflect both the scale of humanitarian needs in Afghanistan and the impact of sustained international support. The agency expressed gratitude to its partners and donors, as well as to the Afghan people, whose resilience and determination continue to underpin progress.

Despite these achievements, the report stresses that ongoing investment and assistance are critical to addressing persistent gaps and ensuring a more stable future for Afghanistan’s children.

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International Sports

Mumbai Indians pull off record chase as IPL action continues

Rickelton was named Player of the Match for his match-defining innings, as Mumbai secured their third win of the season, while Lucknow slipped to a sixth straight defeat.

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Mumbai Indians produced a stunning run chase to defeat Lucknow Super Giants by six wickets in Match 47 of the Indian Premier League 2026 on Monday, overhauling a daunting 229-run target with eight balls to spare at Wankhede Stadium.

After being asked to bat first, Lucknow made a flying start, driven by explosive knocks from Mitchell Marsh and Nicholas Pooran. Pooran smashed a rapid 63 off 21 balls, sharing a 94-run stand with Marsh as LSG surged toward a massive total. However, Mumbai fought back through Corbin Bosch, who removed both set batters to halt the momentum. Late contributions from Aiden Markram and Himmat Singh guided LSG to a competitive 228/5.

In response, Mumbai delivered a near-perfect batting performance. Ryan Rickelton led the charge with a blistering 83 off 32 balls, while Rohit Sharma added 84, as the pair put on a dominant 143-run opening stand that effectively sealed the contest early. 

Despite a brief slowdown in the middle overs, Mumbai comfortably reached the target, with Will Jacks finishing the match in style.

Rickelton was named Player of the Match for his match-defining innings, as Mumbai secured their third win of the season, while Lucknow slipped to a sixth straight defeat.

Meanwhile, attention now turns to today’s clash between Delhi Capitals and Chennai Super Kings, where both sides will be looking to strengthen their positions in the standings. Delhi will aim to build momentum with their balanced lineup, while Punjab will rely on their power hitters to deliver a strong performance.

The match will be broadcast live across Afghanistan on Ariana Television, giving fans the chance to follow all the action as the tournament continues to intensify.

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