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Afghanistan’s economy under the spotlight on eve of 1401, the new solar year

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On the eve of Afghanistan’s new solar year, Nowruz, the year 1400 has proven to be one of increased economic hardships that ultimately led to a financial crisis in the country.

In August, the former government collapsed which sparked widespread panic among Afghans who rushed to banks to draw their money.

People queued for hours, for days and even weeks but as the Ashraf Ghani government tumbled and foreign troops withdrew, foreign funding that propped up the country came to a sudden halt and the banking system froze.

In order to prevent the complete collapse of the banking system, the Islamic Emirate of Afghanistan (IEA), which had swept to power, stepped in and imposed strict restrictions on the amount of cash people could withdraw.

Global sanctions added to the mix and made life even more difficult for Afghans – so much so that the IEA was unable to pay government employees their salaries for the first few months.

Gradually, the economic situation stopped its freefall and leveled out. Humanitarian aid helped ease hunger and shipments of cash from the United Nations has continued to come in to the country. Although sanctions are still in place, the UN has stepped in to assist with regards to the economy.

On a more positive note, some development projects have been kickstarted by the IEA these past few months – especially transit projects connecting Afghanistan to Central Asia.

However, Afghanistan’s economic situation is still critical.

Key problems are as follows:

• No new investments have been made in 1400 in the country
• With the coming to power of the Islamic Emirate, banking activities were suspended for a significant period of time
• International organizations stopped major projects they had been funding, leaving many projects unfinished
• Global sanctions were imposed on the country’s economic system
• Trade between Afghanistan and its neighbors stalled due to a lack of funding and political uncertainty for some time
• The Afghani (AFN) plummeted to a low of 130 AFN to the US dollar. It has since recovered somewhat
• Food and fuel prices have risen unprecedentedly
• About $9 billion of foreign assets were frozen by the United States

Despite all these challenges, the IEA has stepped up efforts to stabilize the economy and to improve the situation. The IEA came out in support of the private sector and worked hard to save the country’s economy from collapsing altogether.

The Ministry of Finance meanwhile said the economic situation in the country has improved slightly in the past few months and that the Islamic Emirate will take major steps to boost the economy in the new year (1401). The IEA also said it will launch some key development projects.

The Ministry of Finance, however, was unable to finance the budget for the new fiscal year from domestic revenue. This is not however new, as a major part of the budget has been funded by the international community for the past 20 years.

Economic experts believe the Islamic Emirate has taken effective steps to stabilize the economy, but many have said government needs to facilitate new investments.

Afghanistan’s private sector has in addition called on the Islamic Emirate to invest in agriculture and mining; to generate electricity; and develop transit, telecommunications, fiber optics and telecommunication sectors.

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Afghanistan, Uzbekistan and Kyrgyzstan agree on framework to boost trade and transit

Officials said the talks focused on easing the movement of goods, particularly Afghan export products destined for Uzbekistan and Kyrgyzstan.

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Afghanistan, Uzbekistan and Kyrgyzstan have agreed to strengthen regional trade and transit cooperation following a high-level trilateral meeting held in Tashkent on the sidelines of the INNOPROM Central Asia expo.

Afghanistan’s Minister of Industry and Commerce Nuruddin Azizi met with Laziz Kudratov, Uzbekistan’s Minister of Investment, Industry and Trade, and Sanzhar Iskenderovich Asylkulov, Deputy Minister of Economy and Commerce of Kyrgyzstan, to discuss measures aimed at facilitating transit procedures, increasing trade volumes and expanding Afghan exports to Central Asian markets.

Officials said the talks focused on easing the movement of goods, particularly Afghan export products destined for Uzbekistan and Kyrgyzstan.

At the conclusion of the meeting, the three sides agreed to establish a joint working group to oversee implementation of the proposed initiatives. They also reached agreement on Afghanistan’s membership in the exhibition platform.

The event brings together participants from across Central Asia, as well as Russia and Belarus, providing a platform for industrial cooperation and investment.

Officials say Afghanistan’s participation is expected to open new opportunities for local industries to showcase products and strengthen their presence in regional markets, while the agreement marks a step toward deeper economic integration and improved regional connectivity.

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Afghanistan showcases industry at key Central Asia expo

The exhibition brings together government officials, investors and manufacturers from across Central Asia and beyond, including participants from Russia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan.

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Afghanistan is making a notable showing at the INNOPROM Central Asia, one of the region’s largest industrial platforms, as Minister of Industry and Commerce Nuruddin Azizi travels to Uzbekistan to attend the event.

The exhibition brings together government officials, investors and manufacturers from across Central Asia and beyond, including participants from Russia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan.

It is aimed at promoting industrial development, showcasing advanced technologies and expanding regional investment cooperation.

According to Afghanistan’s Ministry of Industry and Commerce, more than 60 Afghan companies are taking part, representing sectors such as cotton, coal, pharmaceuticals and agricultural products.

Officials say the participation highlights efforts to strengthen trade ties and position Afghanistan as a growing economic partner in the region.

INNOPROM Central Asia is widely regarded as a key platform for fostering industrial collaboration and unlocking new investment opportunities across Central Asia.

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Afghan commerce minister highlights trade trust and market stability at Antalya Forum

“The message from the Islamic Emirate of Afghanistan is centered around peace and peaceful coexistence,” Azizi stated.

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Afghanistan’s Minister of Industry and Commerce, Nooruddin Azizi, underscored the importance of trust in trade and regional stability during a high-level panel discussion titled “Trust in Trade: The Future of Economic Integration and Stability in South Asia” at the 5th Antalya Diplomacy Forum in Türkiye.

In his remarks, Azizi emphasized the critical need for peace, stability, and stronger human connections between nations. He noted that the Afghan people have faced nearly five decades of hardship, and continue to endure challenges, including the ongoing issue of frozen assets, which limit the country’s economic potential.

“The message from the Islamic Emirate of Afghanistan is centered around peace and peaceful coexistence,” Azizi stated, highlighting the alignment of these values with both religious teachings and the aspirations of the Afghan people.

When asked about the impact of recent regional developments on fuel and liquefied gas prices, Azizi reassured attendees that Afghanistan had already taken proactive steps to mitigate potential disruptions. He shared that while global fuel prices had surged, Afghanistan’s fuel price increase remained modest—only 3 to 5 percent.

“This demonstrates effective planning and market management in securing the country’s fuel and gas supplies,” he added.

Azizi also expressed his gratitude for the Antalya Diplomacy Forum, praising Türkiye for its efforts in tackling global and regional challenges, including its stance on the situation in Gaza.

The Antalya Diplomacy Forum, which continues to serve as an essential platform for fostering regional dialogue, remains focused on economic cooperation, political stability, and addressing pressing global issues.

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