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World Bank predicts Afghan economic growth 3.3% this year
Afghanistan’s economy grew by an estimated 2.9 percent in 2019, driven mainly by strong agricultural growth following recovery from drought, but lingering political uncertainty dampens private confidence and investment, says the World Bank.
Released today, “Navigating a Sea of Uncertainty”, the latest edition of the twice-a-year Afghanistan Development Update examines recent key economic developments and focuses on the impacts of current uncertainties around the outcome of the September 2019 presidential election, levels of future international civilian and security support, and the prospect of a peace agreement with the Taliban. The Update also includes a special topic reflecting on achievement of development outcomes since 2001.
“Growth picked up in Afghanistan in 2019. This is good news, but insecurity and political uncertainty are holding back the Afghan economy,” said World Bank Country Director for Afghanistan Henry Kerali. “Afghanistan needs to ramp up the pace of reforms to generate faster growth necessary to improve the living standards of its people and reduce poverty.”
The report notes that as drought impacts further recede and private sector confidence improves following the conclusion of the presidential election, growth is expected to accelerate to 3.3 percent in 2020. Over the medium-term, growth is projected to hover around 4 percent provided that the security situation does not further deteriorate and that international aid support continues. Growth prospects are subject to other significant downside risks, including further political instability, unexpected cuts in foreign aid, and adverse regional developments.
Domestic revenue collection reached a new high of 14.5 percent of GDP in 2019, up from 13.3 percent in 2018. Strong revenue performance reflected both progress in establishing a robust tax system and substantial one-off revenues, including transfers from the Da Afghanistan Bank.
The potential for much-faster growth exists but remains dependent on continued support from the international community and the Afghan government’s commitment to pushing business environment and anti-corruption reforms, the report says.
“The international community needs to maintain its support to Afghanistan over the medium-term to sustain the country’s recent development progress and help realize its long-term growth and self-reliance prospects. In this effort, the Afghan government needs to assure its international partners that progress is being made on governance and that aid resources are used efficiently,” said Kerali.
To improve confidence in the short-term, the Development Update notes the need for Government to accelerate improvements in the business environment and anti-corruption reforms.
A high-level government–private sector delegation from Uzbekistan, led by Shukhrat Abdullazakov, Governor of Namangan province, arrived in Kabul to enhance trade between the two countries and promote investment in Afghanistan.
According to a press release from the Ministry of Industry, the delegation, which includes deputy governors and more than 30 of Uzbekistan’s top businesspeople and investors, will meet with officials of the Islamic Emirate of Afghanistan and participate in conferences and trade meetings.
The delegation will also travel to Balkh, meet with local officials, and hold business meetings with members of the private sector.
Additionally, the delegation will inaugurate an exhibition of Uzbek products and goods in Mazar-i-Sharif.
This visit follows the trip of Erkinjon Turdimov, Governor of Uzbekistan’s Syrdarya Province, and his accompanying delegation, and is based on meetings between Nuruddin Azizi, Minister of Industry and Trade of the Islamic Emirate, and senior Uzbek officials.
Other governors from Uzbekistan are also expected to visit Afghanistan to further expand bilateral trade and economic relations.
The Herat Chamber of Commerce and Investment announced on Saturday that national traders, jointly through the chamber, have provided approximately 15 million AFN in aid to the people of Iran.
The chamber stated that this aid package was delivered to the Iranian Consulate in Herat. It added that the assistance was intended to express solidarity with families affected by the war.
Mohammad Younes Qazizadeh, head of the Herat Chamber of Commerce and Investment, said: “Today we have presented 15 million AFN to the dear people of Iran through the Herat provincial authorities and the Iranian Consulate, and this aid will continue.”
Meanwhile, officials at the Iranian Consulate in Herat emphasized that Afghanistan and Iran always stand together and fully understand each other’s difficulties.
The Herat Chamber of Commerce and Investment also highlighted that the people of Iran have consistently supported the people of Afghanistan during various crises, and their cooperation in different sectors has reached families affected in the country.
Officials of the Herat Chamber of Commerce and Investment stressed that the process of private-sector humanitarian aid to the affected people of Iran will continue.
Following attacks by the United States and Israel on Iran, many people in the country have been affected and harmed.
Local officials in Badghis have reported that heavy rainfall from midnight until Saturday morning claimed the lives of five people in the province.
According to officials, three people died in Qadis district, while two others, including a three-year-old child, lost their lives in Dara-e-Bum district.
The Badghis Department for Disaster Management stated that the floods not only caused fatalities but also inflicted significant financial losses on local residents and destroyed agricultural land.
However, complete information on the extent of damage and casualties is not yet available. Staff from various government departments have been dispatched to affected areas to conduct preliminary surveys.
Meanwhile, heavy rains and floods in western Afghanistan temporarily blocked the Herat–Kandahar Highway.
According to Mohammad Israil Sayar, head of the Disaster Management Department in Farah province, recent rainfall has caused the Farah River to swell significantly. He added that the situation has now returned to normal, and traffic along the highway has resumed.
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