Business
COVID-19 wreaks havoc on livelihoods of Afghans: World Bank report
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.
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Business
Ministry of commerce allocates land for oil refineries
Acting Minister of Industry and Commerce Nooruddin Azizi, said in a meeting with oil refinery officials that as soon as they are ready to invest, the ministry will establish an oil and gas industrial park.
In this meeting, refinery officials discussed problems regarding the Qashqari oil field and agreed that land should be provided. They said oil extracted from Qashqari needed to be refined through the standard process.
Azizi, while announcing the cooperation and support of the Islamic Emirate and especially the Ministry of Commerce and Industry for the private sector of the country, said: “A joint proposal should be arranged and submitted to this ministry for the land of the refineries, and also if the officials of the refineries are ready to invest in the area of Dara-e-Hairatan, an oil and gas industrial park will be created and the land will be placed under their control.”
Azizi emphasized the need to increase the capacity of existing refineries and the quality of oil, shared the decision of the High Economic Commission regarding the establishment of a large refinery.
Business
Pakistan’s Federal Secretary of Commerce invited to visit Kabul
Acting Minister of Industry and Commerce, Nooruddin Azizi, has invited Pakistan’s Federal Secretary of Commerce Mohammad Khurram Agha to visit Kabul.
In a virtual meeting, the two sides discussed the progress made in the last two and a half years in the country, the increase in trade between the two countries, solving problems and removing trade and transit barriers.
They also discussed the need for more facilities, establishing close relations between the governments and private sectors of the two countries and boosting regional cooperation, the Ministry of Industry and Commerce said in a statement Monday.
Business
Headline inflation in Afghanistan down to -10.2% in January: World Bank
In January 2024, headline inflation experienced a significant downturn, reaching -10.2 percent on a year-on-year basis, the World Bank said in a report.
This substantial drop was largely due to a sharp decline in prices across both food and non-food categories, the report said.
Moreover, core inflation, which strips out the typically volatile food and energy sectors, also fell into negative territory, posting a rate of -6.5 percent on year-on-year basis.
“This ongoing core deflation reflects a troubling inability of both private and public sectors to stimulate sufficient demand. While this period of falling prices may offer temporary financial relief to the most vulnerable households by reducing the cost of living, it can also harm the broader macroeconomy,” the World Bank said.
According to the bank, Afghanistan’s exports contracted by 5 percent on year-on-year basis to $140.5 million in January 2024, down from $148.1 million the previous January.
Food exports to India jumped by 22 percent, compared to an 18 percent decline in Pakistan. Pakistan and India continued to be the top export destinations, claiming 45 percent and 34 percent of the total exports in January 2024, respectively.
The 2023 growth trend in imports extended into January 2024, hitting $830 million, up 37 percent from $600 million in January 2023.
According to the report, in 2023, the afghani (AFN) saw a significant 27 percent appreciation against the US dollar, buoyed by the influx of around $1.8 billion in UN cash shipments and an estimated $2 billion in remittances.
Revenues have been below the Islamic Emirate of Afghanistan’s (IEA) target during the first eleven months of FY2024, with border taxes underperforming despite a surge in imports.
Over the eleven-month span of FY2024, from March 22, 2023, to February 21, 2024, Afghanistan’s revenue collection reached AFN 189 billion, narrowly missing the target by 2 percent but marking a 5.6 percent increase from the previous fiscal year, the report said.
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