Business
UNDP warns Afghan economy to contract by 6% due to COVID-19
United Nations Development Program (UNDP) Afghanistan launched its latest COVID-19 impact assessment report on Wednesday and said the pandemic has set back Afghanistan’s economic growth by several years.
The report, the 4th since the coronavirus outbreak, exposed structural and resource gaps in responding to unforeseen events such as pandemics. The country had to reallocate resources from long-term development priorities to fighting this health crisis.
In a statement issued by the UNDP, the organization said the report, titled “Fiscal Options in Response to Coronavirus Crisis”, focused on the fiscal implications of COVID-19.
The UNDP stated it estimates that due to a combination of external and internal shocks, the Afghan economy will contract by around six percent in 2020.
“Assuming the recovery starts in 2021 and growth performance to be positive between 2021 and 2024, it will be moderate, and well below the pre-pandemic level.
“Without well thought-out recovery-oriented policies, this amounts to a cumulative loss of around 12.5 percent in real GDP by 2024,” read the statement.
UNDP said Afghanistan witnessed a sharp decline in revenues in 2020 due to low economic activity, trade disruption and weaker compliance brought on by the pandemic.
“The government had to adjust the revenue estimates downwards from Afs 209 billion (US$2.71 billion) in 2019 to Afs 144 billion (US$1.87 billion) during the mid-year budget review.”
UNDP stated it estimated an average of 17 percent decline in corporate tax revenue and 18 percent decline in personal income tax revenue.
“Tax on international trade will be the worst hit and revenues may decline to as low as 19 percent due to the decrease in imports, while tax revenue on goods and services might decline by 10 percent,” the statement read.
Meanwhile, UNDP stated the fiscal deficit is expected to increase to around four percent of GDP in 2020.
“The Government of Afghanistan needs to opt for policies and programmes to generate more revenue to address the fiscal deficit.
“Given the economic slowdown, a second wave of the pandemic, continued conflict, and an uncertain peace process and political environment, the country will continue to need grant support from the international community to address the fiscal deficit and maintain its current level of expenditure on basic services,” read the UNDP’s statement.
The organization also stated that additional grants need to be directed at driving and implementing reforms to improve the business regulatory environment, improve governance, encourage investment and strengthen the private sector.
According to the statement, the UNDP and other stated along with other international development partners, it would continue to support Afghanistan in the run up to the donor pledging conference later this month.
However they urged the Afghan government to address the immediate fiscal impact of the pandemic and help reverse its negative effects.
Business
Afghanistan seeks expanded ties with Russia in energy, mining and infrastructure
TASS reported that Kabul is also prepared to cooperate with Moscow in the extraction of mineral resources.
Afghanistan has expressed strong interest in broadening trade and economic cooperation with Russia, with a particular focus on energy, mining and infrastructure projects, according to Russia’s TASS news agency.
In an interview with TASS, Afghanistan’s Ambassador to Moscow, Gul Hassan, said Kabul is keen to import oil and gas from Russia as part of efforts to deepen bilateral economic ties.
He noted that trade relations between the two countries are progressing and that, if key obstacles—especially banking restrictions—are addressed, Afghanistan could also import medicines, industrial goods, grain, vegetable oils and other commodities from Russia.
In return, the ambassador said Afghanistan is ready to export fresh and dried fruits, vegetables, medicinal plants, carpets and mineral resources to the Russian market, adding that expanding export-import operations could significantly increase bilateral trade volumes.
He also revealed plans to open an exhibition of Afghan products in Moscow, which he said would help boost trade turnover.
TASS reported that Kabul is also prepared to cooperate with Moscow in the extraction of mineral resources.
Hassan described the economy as a central pillar of Afghanistan’s foreign policy, emphasizing the government’s goal of positioning the country as a key link in regional economic integration and attracting foreign investment.
He noted that Russian companies have long shown interest in Afghanistan’s industrial, mining and infrastructure sectors.
The ambassador further told TASS that Russian firms are already in talks with relevant Afghan authorities on the construction of small hydroelectric power plants.
Representatives of several Russian companies have reportedly visited Afghanistan and held meetings with officials and technical experts.
According to Hassan, practical steps toward cooperation in the energy and power generation sectors are expected in the near future, pointing to a potential new phase in Afghan-Russian economic relations.
Business
Pakistan, China plan to extend CPEC to Afghanistan, revive trilateral framework
The proposed CPEC expansion into Afghanistan is seen as a move to enhance regional economic integration amid shifting geopolitical dynamics.
Pakistan and China are moving forward with plans to extend the China-Pakistan Economic Corridor (CPEC) into Afghanistan, a strategic step aimed at bolstering regional connectivity and economic cooperation. The expansion, along with the revival of the Pakistan-China-Afghanistan trilateral framework, was discussed in a recent briefing to the Pakistani Senate Standing Committee on Foreign Affairs.
According to Pakistan Today, officials from Pakistan’s Ministry of Foreign Affairs outlined the details during a session in Islamabad, where they reviewed key aspects of Pakistan’s foreign relations, regional developments, and economic diplomacy.
Officials emphasized that Pakistan’s relationship with China remains strong, underscoring the “all-weather” strategic partnership between the two nations. Strengthening ties with Beijing, they stated, continues to be a cornerstone of Pakistan’s foreign policy. This includes unwavering support for China’s position on regional and international issues, particularly the One-China policy and matters related to territorial integrity.
The briefing also touched upon China’s consistent backing of Pakistan in various areas, including sovereignty, economic stability, counter-terrorism, and support for Pakistan’s exit from the Financial Action Task Force (FATF) grey list.
The Kashmir issue was also addressed, with officials noting that China considers it an unresolved matter and advocates for a peaceful resolution in line with UN Security Council resolutions.
The proposed CPEC expansion into Afghanistan is seen as a move to enhance regional economic integration amid shifting geopolitical dynamics. Officials stated that reviving the trilateral framework is part of broader efforts to foster greater cooperation and connectivity in the region, with an eye on long-term stability and prosperity.
The move also reflects both countries’ desire to further integrate Afghanistan into the regional economic landscape, a key element in fostering peace and development.
Business
Uzbekistan–Afghanistan trade rises to $1.6 billion in 2025
Trade relations remain largely export-driven, with Uzbekistan supplying Afghanistan primarily with food products, energy resources, and industrial goods.
Trade between Uzbekistan and Afghanistan rose sharply in 2025, reaching $1.6 billion, according to official data released by Uzbekistan’s National Statistics Committee.
The figure represents a 45.5 percent increase from $1.1 billion in 2024 and an 84.4 percent rise compared with 2023, when bilateral trade stood at $867.5 million, highlighting rapid growth in economic exchanges between the two countries.
Uzbekistan’s exports to Afghanistan accounted for the vast majority of the trade volume, totaling $1.5 billion, or 93.8 percent of overall bilateral turnover. Trade relations remain largely export-driven, with Uzbekistan supplying Afghanistan primarily with food products, energy resources, and industrial goods.
The surge in trade comes as Uzbekistan’s total foreign trade turnover reached $81.2 billion in 2025, reflecting broader efforts to expand and diversify external economic ties. By the end of the reporting period, Uzbekistan maintained trade relations with 210 countries.
China remained Uzbekistan’s largest trading partner, accounting for 21.2 percent of total trade, followed by Russia (16.0 percent), Kazakhstan (6.1 percent), Türkiye (3.7 percent), and the Republic of Korea (2.1 percent).
The latest figures underscore strengthening economic ties between Uzbekistan and Afghanistan amid efforts to boost regional trade and connectivity.
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