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UNDP warns Afghan economy to contract by 6% due to COVID-19

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United Nations Development Program (UNDP) Afghanistan launched its latest COVID-19 impact assessment report on Wednesday and said the pandemic has set back Afghanistan’s economic growth by several years.

The report, the 4th since the coronavirus outbreak, exposed structural and resource gaps in responding to unforeseen events such as pandemics. The country had to reallocate resources from long-term development priorities to fighting this health crisis.

In a statement issued by the UNDP, the organization said the report, titled “Fiscal Options in Response to Coronavirus Crisis”, focused on the fiscal implications of COVID-19.

The UNDP stated it estimates that due to a combination of external and internal shocks, the Afghan economy will contract by around six percent in 2020.

“Assuming the recovery starts in 2021 and growth performance to be positive between 2021 and 2024, it will be moderate, and well below the pre-pandemic level.

“Without well thought-out recovery-oriented policies, this amounts to a cumulative loss of around 12.5 percent in real GDP by 2024,” read the statement.

UNDP said Afghanistan witnessed a sharp decline in revenues in 2020 due to low economic activity, trade disruption and weaker compliance brought on by the pandemic.

“The government had to adjust the revenue estimates downwards from Afs 209 billion (US$2.71 billion) in 2019 to Afs 144 billion (US$1.87 billion) during the mid-year budget review.”

UNDP stated it estimated an average of 17 percent decline in corporate tax revenue and 18 percent decline in personal income tax revenue.

“Tax on international trade will be the worst hit and revenues may decline to as low as 19 percent due to the decrease in imports, while tax revenue on goods and services might decline by 10 percent,” the statement read.

Meanwhile, UNDP stated the fiscal deficit is expected to increase to around four percent of GDP in 2020.

“The Government of Afghanistan needs to opt for policies and programmes to generate more revenue to address the fiscal deficit.

“Given the economic slowdown, a second wave of the pandemic, continued conflict, and an uncertain peace process and political environment, the country will continue to need grant support from the international community to address the fiscal deficit and maintain its current level of expenditure on basic services,” read the UNDP’s statement.

The organization also stated that additional grants need to be directed at driving and implementing reforms to improve the business regulatory environment, improve governance, encourage investment and strengthen the private sector.

According to the statement, the UNDP and other stated along with other international development partners, it would continue to support Afghanistan in the run up to the donor pledging conference later this month.

However they urged the Afghan government to address the immediate fiscal impact of the pandemic and help reverse its negative effects.

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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.

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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.

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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.

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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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Kazakhstan to import metallurgical raw materials from Afghanistan

In addition, Kazakhstan has finalized agreements to import raw materials from Afghanistan and neighbouring Kyrgyzstan to support the country’s metallurgical industry.

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Last Updated on: July 16, 2026

Kazakhstan has reached agreements to import metallurgical raw materials from Afghanistan and Kyrgyzstan as part of efforts to ensure a stable supply for the country’s metals industry, Kazakh Minister of Industry and Construction Yersaiyn Nagaspayev announced on Tuesday.

Speaking at a government meeting, Nagaspayev said the new import agreements are intended to strengthen raw material supplies to Kazakhstan’s metallurgical plants after production in the sector slowed during the first half of 2026.

According to the minister, metallurgical output reached 97.3 percent of planned levels in the first six months of the year. He attributed the slowdown to scheduled maintenance at industrial facilities and the gradual depletion of Kazakhstan’s domestic mineral resource base.

Despite those challenges, Nagaspayev said the sector’s performance improved by 1.8 percent compared with the first five months of the year, largely due to measures aimed at securing reliable supplies of raw materials.

He said domestic producers have increased deliveries of copper, zinc and gold-bearing ores to processing plants, while shipments of zinc concentrate have resumed. In addition, Kazakhstan has finalized agreements to import raw materials from Afghanistan and neighbouring Kyrgyzstan to support the country’s metallurgical industry.

The move highlights Afghanistan’s growing role as a regional supplier of mineral resources. The country is believed to possess significant untapped deposits of copper, iron ore, lithium and a range of other strategic minerals, attracting increasing interest from neighbouring countries seeking to diversify supply chains and strengthen regional trade.

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