Afghanistan faces fiscal shock: UN

AFGHANISTAN: Afghanistan’s GDP could contract 20 per cent within a year, the UN predicted in a new report on Wednesday (Dec 1), saying that the withdrawal of international aid after the Taliban’s return to power is an “unprecedented fiscal shock”.

For decades now Afghanistan’s economy has been undermined by war and drought. But it was propped up by billions in international aid – much of which was frozen when US-led international forces withdrew and the Taliban returned to power in August. “The sudden dramatic withdrawal of international aid is an unprecedented fiscal shock,” United Nations Development Programme (UNDP) Asia Director Kanni Wignaraja said, as the agency released its Afghanistan Socio-Economic Outlook 2021-2022.

Earlier, Afghanistan’s GDP could contract 20 per cent within a year, the UN predicted in a new report on Wednesday (December 1), saying that the withdrawal of international aid after the Taliban’s return to power is an “unprecedented fiscal shock”.

For decades now Afghanistan’s economy has been undermined by war and drought. But it was propped up by billions in international aid – much of which was frozen when US-led international forces withdrew and the Taliban returned to power in August.

– THE HINDU