Afghanistan
Economic overview
Inflation remains negative amid economic stagnation and weak demand
Since April 2023, it has become clear that the deflationary trend has continued, with declines in household savings, reductions in public spending, increases in unemployment, and the negative impact on farmers' incomes due to the ban on opium cultivation. Cuts in international aid and restrictive policies for women and girls pose risks to Afghanistan's reconstruction. Moreover, concerns about the functioning of the banking sector and challenges to payment systems remain significant.
Afghanistan has been appreciating against the US dollar since March 2022
AFN has remained consistently stable against the US dollar since March 2022. This stability can be attributed to the continued effects of UN cash transfers and central bank US dollar bidding. As a result of these measures and the resulting financial contraction, AFN appreciated against major currencies throughout the year.
Afghanistan
Market price updates
In Afghanistan, the national average price of imported flour has been steadily declining following its peak in June 2022. These prices are now even lower than the prices observed in June 2021, with costs now at 32 AFN per piece. kilogram.
The stability in national grain prices can be attributed to a combination of factors, including the continued downward trend in global grain prices and positive results from local harvests. Additionally, strong production in Kazakhstan, historically a major exporter of flour to Afghanistan, also contributed to this stability.
WFP food basket prices fell over the year
The average cost of the WFP food basket in December decreased to 5,394 AFN, a decrease of 29 percentage points compared to the same period last year and 7 percentage points compared to the previous quarter. Despite the earthquake in Herat, the WFP food basket price in Herat continued its downward trend, dropping from 5,521 AFN before the earthquake (September 2023) to 4,946 AFN after the earthquake (December 2023).
Prices of winter essentials have increased slightly due to seasonal demand
In December 2023, the monthly average price of winter essentials commonly used as fuel for heating equipment increased slightly from the previous month due to increased winter usage. Specifically, the prices of pine wood and balut wood increased by 4% and 10%, respectively, compared to the previous month.
