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Afghanistan’s economic collapse could prompt refugee crisis: IMF

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Afghanistan’s economy is set to contract up to 30% this year and this is likely to further fuel a refugee crisis that will impact neighbouring countries, Turkey and Europe, the International Monetary Fund said on Tuesday.

With non-humanitarian aid halted and foreign assets largely frozen after the Islamic Emirate of Afghanistan (IEA) seized power in August, Afghanistan’s aid-reliant economy “faces severe fiscal and balance-of-payments crises”, it said in its regional economic outlook update.

“The resulting drop in living standards threatens to push millions into poverty and could lead to a humanitarian crisis.”

The IMF said the turmoil in Afghanistan was expected to generate important economic and security spillovers to the region and beyond and was “fueling a surge in Afghan refugees”, although it gave no estimates of potential numbers.

“A large influx of refugees could put a burden on public resources in refugee-hosting countries, fuel labor market pressures, and lead to social tensions, underscoring the need for assistance from the international community,” it said.

Assuming a million more Afghans flee their homeland and settle in other countries in a way that is proportional to the existing spread of Afghan refugees, the annual cost of hosting them would amount to $100 million in Tajikistan (1.3% of gross domestic product), about $300 million in Iran (0.03% of GDP) and more than $500 million in Pakistan (0.2% of GDP), the IMF said.

Tajikistan said last month it could not afford to take in large numbers of refugees unless it received international financial assistance.

Other Central Asian nations have also said they have no plans to host refugees.

Another channel through which Afghanistan’s economic troubles could affect its neighbours is trade.

“Exports to Afghanistan are macroeconomically and socially relevant for Iran, Pakistan, Turkmenistan, and Uzbekistan,” the Fund said.

Afghanistan previously served as a source of cash dollars, through both legitimate and possibly illicit cross-border flows, due to its status as a beneficiary of large donor funds, but now even larger amounts of dollar banknotes could start flowing into the country due to its shortages, the IMF said.

The goods they are exchanged for are likely to raise new concerns over money laundering and the financing of terrorism, it added.

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Afghani strengthens nearly 10% against US dollar amid banking sector reforms

The bank said it has expanded oversight of financial institutions and private lenders, improving transparency and promoting more consistent standards across the sector.

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Afghanistan’s central bank, Da Afghanistan Bank, says the national currency has appreciated by 9.93% against the US dollar during the year 1404, citing steady progress in the country’s financial and banking systems.

Officials attributed the gains to cautious monetary policies that have helped stabilise the Afghani against major global currencies while also boosting its value against the dollar.

The bank said it has expanded oversight of financial institutions and private lenders, improving transparency and promoting more consistent standards across the sector.

As part of efforts to better manage liquidity, authorities also collected and destroyed worn-out banknotes in circulation. At the same time, officials reported growth in electronic banking, with digital payment usage rising in recent months.

Central bank spokesperson Haseebullah Noori said initiatives are underway to broaden access to banking services nationwide, including the wider rollout of Islamic banking options.

Analysts welcomed the stabilisation efforts but stressed the need to address ongoing challenges facing domestic banks, including the impact of international financial sanctions on Afghanistan.

They added that expanding Islamic banking could help draw more savings into the formal financial system, noting that a significant share of personal wealth remains outside banks. Bringing those funds into the sector, they said, could inject billions of Afghanis into the economy and further support financial stability.

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Uzbekistan delivers over 290 tons of aid to Afghanistan

The assistance, provided ahead of Eid al-Fitr, is intended to support vulnerable communities while reinforcing ties between the neighboring countries.

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Uzbekistan has delivered more than 290 tons of humanitarian aid to Afghanistan, according to the country’s Ministry of Foreign Affairs.

The assistance, provided ahead of Eid al-Fitr, is intended to support vulnerable communities while reinforcing ties between the neighboring countries.

The shipment includes essential food supplies such as flour, rice, wheat, vegetable oil, instant meals, pasta, and confectionery. An official handover ceremony was held in the border town of Hairatan.

Local officials, including Balkh province representatives and authorities from Hairatan, expressed appreciation for the continued support, acknowledging Uzbekistan’s efforts to assist the Afghan people.

Among those present at the ceremony were Uzbekistan’s Ambassador to Afghanistan, Oybek Usmanov, and Surkhandarya regional governor Ulugbek Kosimov.

The aid delivery underscores Uzbekistan’s ongoing humanitarian engagement and its broader efforts to promote regional cooperation and stability.

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Turkmenistan, Afghanistan discuss steps to speed up land acquisition for TAPI pipeline

By the end of the year, the vessels are expected to deliver about 11,700 pipes as part of preparations for construction of the TAPI pipeline.

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Officials from Turkmenistan and Afghanistan have held talks aimed at accelerating land acquisition for the long-planned Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, according to Afghanistan’s Ministry of Agriculture, Irrigation, and Livestock.

The issue was discussed during a meeting between TAPI project head Murad Amanov, Afghanistan’s acting Minister of Agriculture, Irrigation, and Livestock Mullah Attaullah Omari, and Turkmenistan’s ambassador to Afghanistan Hoja Ovezov.

Amanov briefed Afghan officials on recent progress and emphasized the need to accelerate procedures related to land acquisition and the determination of land prices in line with the framework agreement signed by the four participating countries.

Meanwhile, vessels operated by the Azerbaijan Caspian Shipping Company (ASCO), part of AZCON Holding, have begun transporting pipes for the project. The shipments are being carried from the Port of Baku to the Turkmenbashi International Seaport.

By the end of the year, the vessels are expected to deliver about 11,700 pipes as part of preparations for construction of the TAPI pipeline.

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