Attachments
Afghanistan
Economic Overview
01 Protracted Economic Risks:
Since April 2023, inflation has remained negative amid sustained economic weakness and depressed demand, but the pace of deflation has slowed over the second quarter of 2024. In July 2024, the deflationary trend in headline inflation (including food and non-food/essential commodities) improved to -6.6 percent, easing from a low of -10.2 percent in January 2024. This easing deflationary trend might potentially be attributed to a recovery in demand and the stabilization of the Afghani.
02 Gradual Improvements in Key Staple Commodity Prices:
In Afghanistan, there has been a steady decrease in the national average prices of key staples throughout the previous year. Similarly, the WFP Food Basket prices have declined over the year, showing a 17 percentage point reduction compared to the same period last year. However, the downward trend slowed during the second quarter of 2024, influenced by an increasing trend in global cereal prices and rising tensions in the Black Sea region.
On the other hand, although domestic prices for fertilizers have eased from their peaks in June 2022, they remain elevated. As of July 2024, the domestic prices of DAP and UREA fertilizers were 46 percent and 42 percent higher, respectively, compared to June 2021. This situation places a significant burden on smallholders in Afghanistan. Meanwhile, the prices of improved seeds have significantly decreased, returning to levels similar to those before the collapse.