Business
UNDP warns Afghan economy to contract by 6% due to COVID-19
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.
Business
Regional partners seek progress on Trans-Afghan corridor and CASA railway
The discussions took place during the international NEW SILK WAY business forum in Astana, attended by senior transport officials from the five countries.
Officials from Kazakhstan, Afghanistan, Uzbekistan, Pakistan and Iran have discussed ways to advance the Trans-Afghan transport corridor and the Central Asia-South Asia (CASA) railway project, aiming to strengthen regional connectivity and expand trade routes.
According to Kazakhstan’s Ministry of Transport, the discussions took place during the international NEW SILK WAY business forum in Astana, attended by senior transport officials from the five countries.
The meeting focused on the CASA railway project, which aims to improve transport links between Central, South and West Asia, increase freight capacity and provide better access to international markets and seaports.
Participants reviewed the project’s current status and practical implementation requirements, including route coordination, infrastructure development and the establishment of a cargo base.
They also discussed financing mechanisms, attracting potential investors and international financial institutions, and strengthening coordination among Kazakhstan, Uzbekistan, Afghanistan and Pakistan.
Kazakhstan’s Minister of Transport, Nurlan Sauranbaev, said the participating countries had reaffirmed their shared interest in developing the Trans-Afghan corridor and implementing the CASA railway project.
“It is important for us to move from discussions to practical action,” Sauranbaev said, adding that the project could create an additional transport link between the regions, increase transit capacity, expand freight opportunities and strengthen trade and economic ties.
Following the meeting, participants reaffirmed their commitment to continued cooperation and the development of practical measures to advance the project.
Business
IsDB urges MENAP countries to boost economic resilience and private investment
The meeting brought together regional finance ministers, central bank governors and international financial institutions to discuss economic challenges and policy priorities.
The Islamic Development Bank (IsDB) Group has urged countries across the Middle East, North Africa, Afghanistan and Pakistan (MENAP) region to strengthen economic resilience, address structural challenges and attract private investment to support sustainable growth.
IsDB Group Chairman Dr. Muhammad Al Jasser outlined the priorities during the MENAP Ministers and Governors’ Meeting with the managing director of the International Monetary Fund (IMF), held on the sidelines of the World Bank Group and IMF meetings in Bangkok, Thailand, according to an IsDB statement.
Al Jasser identified four key priorities: maintaining macroeconomic stability, addressing structural economic weaknesses, mobilizing private capital and strengthening regional integration.
He stressed the need to rebuild fiscal and external financial buffers to help countries withstand economic shocks, while investing in infrastructure, human capital and economic diversification.
He also highlighted the importance of private-sector investment, stronger partnerships and innovative financing mechanisms in driving development.
On regional cooperation, Al Jasser called for improved connectivity and stronger trade and investment ties to develop regional value chains and create opportunities for sustainable growth.
The IsDB Group said it has approved nearly US$100 billion cumulatively for member countries across the MENAP region, reaffirming its commitment to supporting more diversified, resilient and inclusive economies.
The meeting brought together regional finance ministers, central bank governors and international financial institutions to discuss economic challenges and policy priorities.
Business
Hairatan railway port sees over 280 wagon arrivals daily from Central Asia
The Hairatan railway port in northern Afghanistan receives between 280 and 300 freight wagons daily from Central Asian countries, highlighting its growing role in connecting Afghanistan to regional and international markets.
The 75-kilometer Hairatan–Mazar-e-Sharif railway links Afghanistan with Uzbekistan and provides a key route for transporting goods from Central Asia, China and other international markets into the landlocked country.
Sayed Qadim Karimi, head of railway transportation at Hairatan port, told China’s Xinhua news agency that trade activity had increased this year, with an average of 280 to 300 wagons arriving at the port each day.
He said the railway transports a wide range of goods to Afghanistan, including clothing, medical equipment, machinery and electrical equipment, adding that trade with China had expanded in recent years.
Afghan traders say the railway connection has helped strengthen commercial ties with China and other regional countries while making it easier to transport imported goods.
“We transport our goods from China by freight train via Kazakhstan and Uzbekistan and receive them at Hairatan port,” businessman Ahmad Agha told Xinhua.
Agha said trade with Chinese businesses offered promising opportunities and expressed hope that further railway development would strengthen commercial ties with Kazakhstan, Russia and European countries.
He added that rising cargo volumes had created employment opportunities for local residents, with hundreds of workers handling containers at the port daily to support their families.
Another Afghan businessman, Ahmad Farid Fardan, who imports women’s clothing and colorful fabrics from China, said the railway connection had strengthened trade relations between the two countries.
Fardan expressed hope that expanding railway networks would help Afghanistan broaden its trade and economic relations with China and other countries in the region.
The railway’s role in China-Afghanistan trade dates back to 2016, when the first cargo train from China reached Hairatan as part of a pilot project. In 2019, Afghanistan sent its first export train to China, carrying several containers of talc powder.
The Hairatan railway remains an important transport link for Afghanistan’s import and export activities, offering access to regional markets and broader trade networks extending to Kazakhstan, Kyrgyzstan, Russia, China and Europe.
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