Business

World Banks says Afghanistan’s economy adjusting to new realities

Published

1 year ago

October 19, 2022

(Last Updated On: October 19, 2022)

The World Bank said in it’s latest Afghanistan Development Update report that the country’s economy is adjusting to a “new normal” following the collapse of the former government and take over by the Islamic Emirate of Afghanistan (IEA).

According to the report, a sharp decline in public spending, lower household incomes, and reduced consumption caused aggregate demand to fall, while disruptions in the payment system and supply constraints further hampered private sector activities, initially forcing many businesses to close or scale down their operations.

The report noted that preliminary statistics on the gross domestic product (GDP) show that the economy contracted by about 20 percent in 2021.

However, the resumption of off-budget international support for humanitarian needs and basic services helped mitigate some of the negative impacts over the past year.

The report concludes that Afghanistan’s economy is now much smaller than before after contracting significantly. The economy has now reached a point where it is likely to plateau.

The World Bank stated that while inflation remains high, some indicators have improved: exports have increased, exchange-rate volatility has reduced, and domestic revenue collection is relatively healthy.

In addition, private businesses are adjusting to the new operating environment.

“While there are signs of economic stabilization and resilience of Afghan businesses, the country continues to face enormous social and economic challenges that are impacting heavily on the welfare of the Afghan people, especially women, girls, and minorities,” said Melinda Good, World Bank Country Director for Afghanistan.

“Living conditions showed slight improvements in the past few months, but deprivation remains very high across the country, and persistent inflation might further erode any welfare gains,” she added.

The report projects that the real GDP in 2022 will contract further, with an accumulated contraction of close to 30-35 percent between 2021 and 2022.

“A range of economic and political scenarios is possible for Afghanistan’s future. While all scenarios depend on continued off-budget aid from the international community, a more upside and sustainable trajectory requires actions by the interim Taliban (IEA) administration to unlock much-needed economic integration and domestic opportunities for the private sector to create jobs for the Afghan people,” added Good.

Related Topics:Afghanistan Economy featured World Bank

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Trade volume between Pakistan and Afghanistan increases by 66% in past year

Business

Export volume totals over $140 million in last month of 1402

Published

1 day ago

April 17, 2024

Ariana News

(Last Updated On: April 17, 2024)

The National Statistics and Information Authority (NSIA) confirmed Tuesday that in the last month of solar year 1402, (March 2024) Afghanistan’s exports totaled $141.1 million and imports totaled $789.6 million.

This was down from $174 million for exports in the same period in 1401. However, imports increased by $99.2 million in 1402, up from $690.4 million.

Most exports in the last month of 1402 went to Pakistan, India and the United Arab Emirates, while in the last month of 1401 exports went to Pakistan, India and China.

Business

Afghanistan-Kazakhstan chamber of commerce opens in Herat

Published

3 days ago

April 15, 2024

Ariana News

(Last Updated On: April 15, 2024)

The Ministry of Interior said the governor of Herat province Islam Jar met with Alim Khan Yasin Gildaye, Ambassador of Kazakhstan to Afghanistan, to discuss various issues around trade.

According to the ministry, the two sides discussed the expansion of trade facilities, increasing the volume of trade exchanges between traders of the two countries, reducing customs tariffs, solving the challenges of traders and issuing visas to them.

The Afghanistan-Kazakhstan Chamber of Commerce has been opened in Herat in order to facilitate and increase trade between the two countries.

Business

Afghanistan reaches self-sufficiency in production of 133 items: MoIC

Published

5 days ago

April 13, 2024

Ariana News

(Last Updated On: April 13, 2024)

The Ministry of Industry and Commerce (MoIC) says Afghanistan has reached self-sufficiency in 45 sectors and the production of 133 items, and that the ministry is striving to change Afghanistan from an importing country to an exporting one.

The ministry officials said that for this purpose, supporting domestic products and attracting investment is essential.

The ministry’s spokesman Abdul Salam Jawad Akhundzada emphasized increasing the use of domestic goods and products in government and national projects and added that efforts have also begun to find a market for domestic products inside and outside the country.

“We have reached self-sufficiency in 133 items of production, which is 45 sectors, and also we reached the capacity of semi-self-sufficiency in 95 items of production, which is 27 sectors,” he said.

Meanwhile, the Chamber of Industries and Mines (ACIM) says over the past two and a half years, more attention has been paid to the development of domestic production and it is also expanding.

The chamber officials stressed expanding the culture of using domestic products in government projects.

“I think that the government is one of the biggest consumers in the market if it uses domestic products in all its development projects,” said Abdul Nasir Rashtia, a member of ACIM.

Economic experts also said that if the use of domestic products in government projects increases, Afghanistan will quickly move towards economic independence.