Business
Afghanistan’s GDP to expand by 3% in 2021: ADB
The Asian Development Bank (ADB) forecasts that Afghanistan’s gross domestic product GDP growth will increase by 3% in 2021 and 4% in 2022 after the normalization of business activity and market sentiment.
In its Asian Development Outlook (ADO) 2021 released on Wednesday, the ADB stated that Afghanistan’s economic growth is expected to recover this year and accelerate next year after a sharp decline in 2020 from the coronavirus disease (COVID-19) pandemic and continued violence and instability.
“Afghanistan’s economy experienced unprecedented disruption in 2020 due to COVID-19 pandemic, political instability and continued violence, which cut remittances, trade, and revenue,” said ADB Country Director for Afghanistan Narendra Singru.
“With a successful COVID-19 vaccine rollout and post-pandemic recovery, the country should be on track to achieve economic growth this year and in 2022 as business activity and market sentiment normalize,” Singru said.
According to the report, inflation more than doubled from 2.3% in 2019 to 5.6% in 2020 driven by higher food prices. Food price inflation in 2020 was estimated at 10% with the highest spike recorded in April when border closure and panic buying propelled it to 16.6%. Inflation is projected to moderate to 5.0% in 2021 and 4.0% in 2022 as food supplies improve.
However, risks remain, including implementing vaccinations in remote and insecure areas, conflict, criminality, corruption, political instability, and broader social fragility. If unaddressed, these could weigh heavily on the economy and impede recovery.
“Supporting the recovery of micro, small, and medium-sized enterprises (MSMEs) hard hit by the pandemic is pivotal to safeguarding workers’ incomes and livelihoods, according to the report. Before the pandemic, MSMEs were estimated to provide nearly 1.6 million service and industry jobs. The government approved a 2-year support package worth $295 million in October 2020 to improve business conditions and implemented countercyclical measures that include support for MSMEs,” the report read.
The ADB suggests that Afghanistan should facilitate MSME access to markets by developing infrastructure, improving security, combating corruption, simplifying regulation, strengthening property rights and contract enforcement, and promoting innovation and better labor skills in order to improve the business environment.
“Increasing access to credit and further expanding the formal bank sector is also crucial,” the organization said.
“ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region,” the report concluded.
Afghanistan’s state-owned Oil and Gas Company has announced a temporary adjustment to some technical standards for importing gasoline, diesel and liquefied petroleum gas (LPG) following a sharp rise in global oil and gas prices and their impact on the domestic market.
In a statement, the company said the committee responsible for preventing the import of substandard fuel had reviewed market conditions and domestic demand before deciding to temporarily apply revised limits to certain technical specifications and permissible standards for imported fuel under specific conditions.
The company said the move is an exceptional and temporary measure aimed at facilitating fuel imports, ensuring timely market supply, preventing shortages and reducing the impact of global price volatility. The revised standards will remain in effect until market conditions stabilize and relevant authorities issue further instructions.
The decision comes as fuel prices have risen sharply across Afghanistan in recent days, prompting widespread public concern and complaints.
The increase has been linked to a significant decline in Afghanistan’s fuel imports from Russia following recent Ukrainian attacks on Russian oil facilities, which have disrupted supplies.
Business
Iran, Afghanistan and Tajikistan sign agreement to boost regional transit
Officials said the agreement reflects the three countries’ shared commitment to improving regional connectivity, expanding trade and making more effective use of existing transit corridors.
Iran, Afghanistan and Tajikistan have signed a joint agreement aimed at strengthening regional connectivity and facilitating international transit and road freight cooperation among the three countries.
According to the Iranian Embassy in Dushanbe, the agreement was signed following a trilateral meeting held in the northeastern Iranian city of Mashhad, where officials discussed ways to expand regional transport and economic cooperation.
The agreement is designed to enhance cross-border freight transportation, facilitate international transit, strengthen economic ties and promote closer coordination in the field of international road transport.
The document was signed by Reza Akbari, Iran’s Deputy Minister of Roads and Urban Development and head of the Road Maintenance and Transportation Organization, Shayesteh Saeedmoradzadeh, Deputy Minister of Transport of Tajikistan, and Yar Mohammad Ramazan, Director General of Legal Affairs and Agreements at Afghanistan’s Ministry of Transport and Civil Aviation.
Officials said the agreement reflects the three countries’ shared commitment to improving regional connectivity, expanding trade and making more effective use of existing transit corridors.
The initiative is expected to support greater economic cooperation, facilitate the movement of goods and strengthen Afghanistan’s role as a key transit link between Central and South Asia.
Business
Iran, Afghanistan and Tajikistan discuss expanding regional transit cooperation
Officials from the three countries met in the northeastern city of Mashhad, the capital of Razavi Khorasan Province, on July 14 and 15.
Iran, Afghanistan and Tajikistan have held trilateral talks aimed at expanding cooperation in transit and road freight transportation as the three countries seek to strengthen regional connectivity and boost trade.
According to Iran’s Ministry of Roads and Urban Development, officials from the three countries met in the northeastern city of Mashhad, the capital of Razavi Khorasan Province, on July 14 and 15.
The discussions focused on enhancing cooperation in cross-border road freight transport, activating regional transit corridors, increasing trade exchanges and promoting broader economic cooperation.
The ministry said the initiative could facilitate international trade, strengthen regional connectivity and support sustainable economic development across the region.
It added that the meeting marked an important step toward making better use of the three countries’ shared transit potential, strengthening regional partnerships, enhancing the region’s role in international transport corridors and expanding transit infrastructure.
According to an analysis by Trend, the trilateral meeting could pave the way for the development of new logistics routes linking the three countries. The report said the initiative aligns with Iran’s broader strategy of strengthening connectivity with Central Asia and maximizing its role as a regional transit hub.
In recent years, Iran has expanded investment in key transport projects, including the International North-South Transport Corridor (INSTC), Chabahar Port, eastern border crossings and railway infrastructure. Increased freight cooperation with Afghanistan and Tajikistan is expected to improve access to Central Asian markets while contributing to higher regional trade and transit revenues.
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