In its Global Economic Prospects for 2020 report, the World Bank has predicted a 5.5 percent decline in the Afghan economic growth rate.
According to the World Bank, although the South Asia region has witnessed a smaller number of COVID-19 cases than many other regions, tourism activity has faded, and domestic pandemic mitigation measures are weighing heavily on short-term economic activity.
“Deteriorating economic conditions in advanced economies and major emerging market economies are impacting export-related industries. In addition, the incidence of COVID-19 cases is still rising rapidly regionally,” said the World Bank in a statement on Tuesday.
The organization also said that a visible decline in investments will have a negative impact on the country’s economy.
The Afghan Ministry of Economy has also said that the decline in economic growth will be felt even in the coming years.
“The problems originating from the spread of the coronavirus have created major challenges and their impacts will be felt even in the next few years,” said Suhrab Bahman, a spokesman for the Ministry of Economy.
Some institutions are still optimistic.
“This year there was good rainfall and it will have positive impact on the agriculture,” said Haseeb Muwahid, the deputy head of the Central Statistics Organization.
“Pakistan (-2.6% in FY 2019/20) and Afghanistan (-5.5% in 2020) are both projected to experience contractions, as mitigation measures are anticipated to weigh heavily on private consumption. Key labor-intensive export sectors are expected to contract sharply and recover only slowly,” according to the World Bank.
Meanwhile, the Afghan Chamber of Commerce and Investment (ACCI) has expressed deep concerns over the challenges facing Afghan exports, saying the government needs to settle the problem with regional nations to avoid further financial loss.
“Currently, it is the season of our exports, but Pakistan routes are closed, we do not have any proper transit situations, our problems are growing and this could lead us to an economic recession,” said Zaman Hashemi, the head of ACCI.