Released today, “Navigating a Sea of Uncertainty”, the latest edition of the twice-a-year Afghanistan Development Update examines recent key economic developments and focuses on the impacts of current uncertainties around the outcome of the
“Growth picked up in
The report notes that as drought impacts further recede and private sector confidence improves following conclusion of the presidential election, growth is expected to accelerate to 3.3 percent in 2020. Over the medium-term, growth is projected to hover around 4 percent provided that the security situation does not further deteriorate and that international aid support continues. Growth prospects are subject to other significant downside risks, including further political instability, unexpected cuts in foreign aid, and adverse regional developments.
Domestic revenue collection reached a new high of 14.5 percent of GDP in 2019, up from 13.3 percent in 2018. Strong revenue performance reflected both progress in establishing a robust tax system and substantial one-off revenues, including transfers from the
The potential for much-faster growth exists but remains dependent on continued support from the international community and the Afghan government's commitment to pushing business environment and anti-corruption reforms, the report says.
“The international community needs to maintain its support to
To improve confidence in the short-term, the Development Update notes the need for Government to accelerate improvements in business environment and anti-corruption reforms.