COVID-19 will have a profound effect on Afghanistan’s economy which is likely to contract by between 5.5 percent and 7.4 percent this year, said the World Bank in its latest biannual Afghanistan Development Update. 

According to the World Bank, this will exacerbate poverty and lead to a sharp decline in government revenue. 

“The COVID-19 crisis is having a devastating impact on the livelihoods of Afghans while undermining the government’s revenue collection and its capacity to finance comprehensive programs to save lives, protect the poor, and jumpstart the economy,” said Henry Kerali, World Bank Country Director for Afghanistan.

The report titled Surviving the Storm was released on Wednesday and examines the coronavirus impacts on Afghanistan’s economic development. 

As stated in the report, COVID-19 has hit Afghanistan in the midst of a difficult political transition, an intensifying conflict, and significant uncertainty regarding future grant support. 

خبر: بر اساس یافته های تازه ترین گزارش اقتصادی بانک جهانی، میزان رشد اقتصادی افغانستان درسال ۲۰۲۰ میلادی به دلیل تاثیرات منفی شیوع ویروس کووید-۱۹ بین ۵.۵ الی ۷.۴ درصد کاهش خواهد یافت. جزییات بیشتر را اینجا بخوانید:https://t.co/nKpdadp6IP pic.twitter.com/K5ILIr03hF

— World Bank South Asia (@WorldBankSAsia) July 15, 2020

“While a peace agreement has been signed between the US and the Taliban, laying the foundations for negotiation of a comprehensive political settlement, Taliban attacks on Afghan security forces have intensified,” the report states. 

It also points out the future of international assistance remains in question, while the US has substantially reduced troop numbers this year, with further reductions likely. 

Current grant pledges expire at the end of 2020, and international partners are due to consider future aid commitments at an international conference in November. 

“Without progress towards a sustainable peace and commitments to continued grant support from international partners, medium-term prospects appear increasingly grim,” read the report.  

The report warns that the proportion of Afghans living in poverty may increase from 55 percent in 2017 to between 61 percent and 72 percent in 2020 because of declining incomes and the rising cost of food. The report finds that economic activity plummeted in the first half of 2020 as lockdowns and social distancing measures to curb COVID-19 negatively impacted the industry and service sectors. 

To address the impacts of the crisis, the report recommends that tightly constrained public expenditures be carefully prioritized to protect the most vulnerable and limit long-term economic damage. 

The report highlights the need for continued financial support from development partners. 

“Short-term measures are needed to support households through the current crisis, while improvements in the business regulatory environment and maintaining the core functions of government will pave the way for longer-term recovery,” said Kerali. 

“Ongoing support from development partners will help finance critical government operations and restore private sector confidence. The World Bank is working closely with the Government of Afghanistan both to implement the short-term response and lay the foundations for longer-term recovery,” Kerali added.

For full report CLICK HERE 

https://documents.worldbank.org/en/publication/documents-reports/documentdetail/132851594655294015/afghanistan-development-update-surviving-the-storm