Business
World Bank warns of increased poverty due to COVID-19 shock
The World Bank has stated that a clear commitment from international partners to continue grant support would help reduce uncertainty and improve investor confidence in Afghanistan which would in turn enable the country to recover from the severe impacts of the COVID-19 crisis.
In its twice-yearly report, the World Bank stated that South Asia as a whole is set to plunge into its worst-ever recession due to the pandemic which will take a heavy toll on informal workers and push millions of people in the region into extreme poverty.
According to the report, although Afghanistan experienced moderate growth in 2019 as the agricultural sector recovered from the impacts of drought, the economy is estimated to have contracted sharply in the first half of 2020 due to economic disruptions associated with nation-wide lockdowns, border closures, and declining remittance inflows.
In addition, the report stated that medium-term prospects are subject to high levels of uncertainty, related to the COVID-19 pandemic, peace talks and future international security and aid support.
“Given the shock to the economy, poverty is expected to increase in 2020,” the report stated.
While there was significant growth in wheat production, the World Bank said this was not enough to offset the large negative impact of COVID-19 on other sectors of the economy.
The World Bank stated that while inflation was low in 2019 (averaging 2.3 percent) it increased significantly in 2020.
One reason was that in March and April 2020 – during lockdown – panic buying and import disruptions resulted in a sharp increase in food prices, which led government to adopt administrative measures to prevent price gouging.
Government also initiated an emergency wheat distribution program that resulted in a food inflation decline in the months that followed.
In the first quarter of 2020 Afghanistan registered a growth in exports of 11 percent year-on-year, which reflected the improved performance of air corridors. However, a weak domestic demand led to a 14 percent decline in imports.
“In the second quarter of 2020, both imports and exports fell precipitously given border closures and disruptions to trade and transportation, with greater absolute declines in imports driving an improvement in the trade and current account balances,” the report read.
With the onset of the COVID-19 crisis, weak economic activity, disruptions to trade and compliance, revenue performance deteriorated significantly and revenue estimates for 2020 were revised downward by over 30 percent (from Afs 209 billion to 144 billion) in the budget mid-year review.
“Total domestic revenue collection at end-June reached Afs 74.7 billion, 20 percent lower than the initial budget target,” the report stated.
Poverty meanwhile is believed to have worsened in 2019 surpassing 54.5 percent amid continued violence and political uncertainty and “in the first half of 2020, with declining household incomes due to economic hardship, higher food prices due to COVID-19, a significant fall in remittances, and high returnee flows, poverty is estimated to have further increased,” the report read.
According to the report, the outlook for the rest of 2020 was grim as the GDP is expected to contract by 5.5 percent – again largely due to the impact of the pandemic.
“In following years, the pace of recovery is expected to be constrained in a context of continued insecurity, uncertainties regarding the outcome of planned peace talks, and questions about the level and duration of international security and aid support.
“The trade deficit is projected to narrow to 26 percent of GDP down from 30.4 percent in 2019. While exports are projected to fall by 24 percent, imports are expected to decline by around 18 percent,” read the report.
World Bank analysis meanwhile suggests that the combination of reduced incomes and higher prices could drive the poverty rate to as high as 72 percent in the medium term.
“Over the medium term, the poverty outlook hinges on the pace of economic recovery and the continued provision of international aid and humanitarian support,” the report read.
“The main source of downside risk to the outlook stems from possible further adverse COVID-19 developments,” the World Bank stated adding that additional sources of risk include further political instability, a deterioration of security conditions, uncertainties associated with the planned peace agreement with the Taliban, and precipitous reductions in aid flow.
“By contrast, on the upside, a sustainable and credible political settlement with the Taliban could help boost growth, confidence and private investment,” the bank stated.
In terms of recommendations, the World Bank stated that given Afghanistan’s declining revenues and constrained fiscal potential, public expenditures need to be carefully directed to protecting the vulnerable, limiting long-term economic damage, and establishing solid foundations for economic recovery.
“To support households, the government should prioritize: i) targeted social protection measures; and ii) ensuring the continued provision of basic services, especially healthcare.
“To support the private sector, priorities include: i) pursuing business regulatory reforms to facilitate new investment; ii) expanding access to credit; iii) ensuring the continued provision of basic infrastructure; and iv) avoiding accumulating arrears to private sector vendors.”
Business
Trade bodies warn almost 11,000 Afghan transit containers stuck at Karachi port
SCCI officials urged authorities to separate trade from political tensions and immediately launch dialogue to restore commercial traffic between the two countries.
Trade bodies report that nearly 11,000 Afghan transit trade containers are stranded at Karachi port, while thousands more— including shipments of perishable goods—remain stuck at the Ghulam Khan, Spin Boldak, Kharlachi, and Torkham crossings between Afghanistan and Pakistan.
Traders involved in Pakistan–Afghanistan bilateral and transit commerce say they have suffered billions of Pakistani rupees in losses as the prolonged border shutdown continues to stall the movement of goods. Perishable food items have already begun to spoil, compounding financial losses.
They also report a sharp drop in bilateral trade volumes. Exporters who were already issued Form-E certificates have been unable to dispatch consignments, with the closure now nearing two months.
Sarhad Chamber of Commerce and Industry (SCCI) President Junaid Altaf said trade—already limited—has deteriorated further due to the closure of crossings. He estimated losses of roughly $45 million since the Torkham closure began, adding that the halt is damaging for both economies and directly affecting families whose livelihoods depend on trade.
SCCI officials urged authorities to separate trade from political tensions and immediately launch dialogue to restore commercial traffic between the two countries.
In recent weeks, repeated closures of the Pakistan–Afghanistan crossing have also brought pharmaceutical exports to a halt, putting nearly $200 million worth of medicines at risk. Hundreds of trucks carrying antibiotics, insulin, vaccines, and cardiovascular drugs remain stuck at Torkham and Chaman, with temperature-sensitive supplies facing potential spoilage.
The Pakistan Pharmaceutical Manufacturers Association (PPMA) warned that the disruption extends far beyond Afghanistan’s medicine supply. Afghanistan is Pakistan’s main overland route to Uzbekistan, Tajikistan, Turkmenistan, and Kazakhstan, and ongoing shutdowns are undermining key regional connectivity projects, including the Pakistan–Uzbekistan–Afghanistan railway.
Stakeholders are calling for urgent steps to reopen the crossings, warning that prolonged closures threaten not only pharmaceutical exports but Pakistan’s broader economic engagement across the region.
Business
Pakistan’s citrus export crisis deepens amid ongoing Afghanistan trade route closure
Afghanistan, which absorbs around 60% of Pakistan’s citrus exports, has remained closed to trade since mid-October.
Pakistan’s citrus sector is facing a worsening export crisis as the closure of the Afghanistan crossing continues to block access to its largest market.
Despite the start of the 2025 citrus season, exports are set to fall further from an already steep decline — dropping from $211 million in fiscal year 2021 to just $92.5 million in fiscal year 2025.
Afghanistan, which absorbs around 60% of Pakistan’s citrus exports, has remained closed to trade since mid-October.
This year alone, Pakistan shipped 153,683 tonnes of citrus to Afghanistan, while exports through the Afghan transit route also supply Russia, Kazakhstan, and Uzbekistan. With that corridor shut, exporters warn that the bulk of Pakistan’s kinnow harvest could go unsold.
A temporary policy exemption now allows citrus shipments to transit through Iran, but exporters say volumes to Central Asia and Russia cannot compensate for the loss of the Afghan market.
The crisis, however, goes deeper than the current crossing closure situation. Pakistan’s citrus industry continues to suffer from long-standing structural challenges — including reliance on the outdated, seeded kinnow variety that makes up over 90% of exports.
Climate change, rising pest pressure, shrinking yields, and declining A-grade fruit quality have all eroded competitiveness. Yields have fallen to about six tonnes per acre, and nearly half of kinnow processing units have closed.
Global competitors such as Egypt, China, Spain, Morocco, and Brazil have overtaken Pakistan by introducing new seedless, high-yielding varieties with longer harvest windows. As profits shrink, farmers are abandoning citrus orchards: the cultivated area has dropped 16% in the past five years.
Experts say Pakistan must urgently invest in developing seedless, climate-resilient varieties and strengthen existing research centres. At the same time, trade officials need to diversify export destinations by securing new sanitary and phytosanitary agreements to reduce dependence on a single market.
Without structural reforms and diversified access, Pakistan’s signature fruit risks losing its place in global markets — and its farmers risk losing their livelihoods.
Business
Afghanistan signs agreement with DP World to bolster ports infrastructure
The Ministry of Finance of Afghanistan and UAE-based DP World have signed an investment term sheet to modernize key commercial land ports, marking a significant step in enhancing the country’s trade infrastructure.
Abdullah Azzam, Head of the Economic Affairs Office at the Office of the Prime Minister, stated that the agreement opens the door for foreign investment and new contracts.
He said that that under this agreement, Afghanistan’s ports will be modernized and equipped with cutting-edge technology.
The agreement outlines the development of cargo handling facilities, port management systems, and operations using advanced equipment in line with international standards. Hairatan Port will be upgraded in the first phase, followed by Torkham Port in the second phase, with subsequent expansion to logistics corridors, economic zones, and other national projects.
DP World officials emphasized that the modernization of these ports will not only increase trade but also create new employment opportunities.
They highlighted Afghanistan’s strategic location as a vital link between Central and South Asia and pledged continued efforts to support the country’s economic growth.
Economic analysts believe the investment will boost trade efficiency, reduce costs, and enhance the country’s transit capacity. Modernizing the ports is also expected to attract further foreign investment and strengthen Afghanistan’s overall economy.
-
Business4 days agoAriana Afghan Airlines boost air trade with arrival of new cargo aircraft
-
Sport3 days agoILT20: Nissanka fires Gulf Giants to four-wicket win over Dubai Capitals
-
Business2 days agoAfghanistan signs agreement with DP World to bolster ports infrastructure
-
Latest News5 days agoIran offers fully funded virtual education for Afghan students returning from abroad
-
Latest News2 days agoSyria’s President challenges West’s counter-terrorism claims in Afghanistan and Iraq
-
Sport4 days agoFIFA confirms all 12 groups for 2026 World Cup
-
Regional5 days agoPutin questions US punishing India for buying Russian oil
-
Sport4 days agoACL: Abu Muslim Farah and Jawanan Perozi 6-0; Istiqlal Kabul and Sarsabz Yashlar 3-1
