Afghanistan Economy - 2021

GEOGRAPHICAL NAMES 

Economic overview

Prior to 2001, Afghanistan was an extremely poor, landlocked, and foreign aid-dependent country. Increased domestic economic activity occurred following the US-led invasion, as well as significant international economic development assistance. This increased activity expanded access to water, electricity, sanitation, education, and health services, and fostered consistent growth in government revenues since 2014. While international security forces have been drawing down since 2012, with much higher U.S. forces’ drawdowns occurring since 2017, economic progress continues, albeit uneven across sectors and key economic indicators. After recovering from the 2018 drought and growing 3.9% in 2019, political instability, expiring international financial commitments, and the COVID-19 pandemic have wrought significant adversity on the Afghan economy, with a projected 5% contraction.

Current political parties’ power-sharing agreement following the September 2019 presidential elections as well as ongoing Taliban attacks and peace talks have led to Afghan economic instability. This instability, coupled with expiring international grant and assistance, endangers recent fiscal gains and has led to more internally displaced persons. In November 2020, Afghanistan secured $12 billion in additional international aid for 2021-2025, much of which is conditional upon Taliban peace progress. Additionally, Afghanistan continues to experience influxes of repatriating Afghanis, mostly from Iran, significantly straining economic and security institutions.

Afghanistan’s trade deficit remains at approximately 31% of GDP and is highly dependent on financing through grants and aid. While Afghan agricultural growth remains consistent, recent industrial and services growth have been enormously impacted by COVID-19 lockdowns and trade cessations. While trade with the People’s Republic of China has rapidly expanded in recent years, Afghanistan still relies heavily upon India and Pakistan as export partners but is more diverse in its import partners. Furthermore, Afghanistan still struggles to effectively enforce business contracts, facilitate easy tax collection, and enable greater international trade for domestic enterprises.

Current Afghan priorities focus on the following goals:

• Securing international economic agreements, many of which are contingent on Taliban peace progress;
• Increasing exports to $2 billion USD by 2023;
• Continuing to expand government revenue collection;
• Countering corruption and navigating challenges from the power-sharing agreement; and
• Developing a strong private sector that can empower the economy.

Real GDP growth rate

2.7% (2017 est.)

2.2% (2016 est.)

1% (2015 est.)

Inflation rate (consumer prices)

5% (2017 est.)

4.4% (2016 est.)

Real GDP (purchasing power parity)

$78.557 billion (2019 est.)

$75.6 billion (2018 est.)

$74.711 billion (2017 est.)

note: data are in 2017 dollars

GDP (official exchange rate)

$20.24 billion (2017 est.)

Real GDP per capita

$2,065 (2019 est.)

$2,034 (2018 est.)

$2,058 (2017 est.)

note: data are in 2017 dollars

Gross national saving

22.7% of GDP (2017 est.)

25.8% of GDP (2016 est.)

21.4% of GDP (2015 est.)

GDP - composition, by sector of origin

agriculture: 23% (2016 est.)

industry: 21.1% (2016 est.)

services: 55.9% (2016 est.)

note: data exclude opium production

GDP - composition, by end use

household consumption: 81.6% (2016 est.)

government consumption: 12% (2016 est.)

investment in fixed capital: 17.2% (2016 est.)

investment in inventories: 30% (2016 est.)

exports of goods and services: 6.7% (2016 est.)

imports of goods and services: -47.6% (2016 est.)

Ease of Doing Business Index scores

Overall score: 44.1 (2020)

Starting a Business score: 92 (2020)

Trading score: 30.6 (2020)

Enforcement score: 31.8 (2020)

Agricultural products

wheat, milk, grapes, vegetables, potatoes, watermelons, melons, rice, onions, apples

Industries

small-scale production of bricks, textiles, soap, furniture, shoes, fertilizer, apparel, food products, non-alcoholic beverages, mineral water, cement; handwoven carpets; natural gas, coal, copper

Industrial production growth rate

-1.9% (2016 est.)

Labor force

8.478 million (2017 est.)

Labor force - by occupation

agriculture: 44.3%

industry: 18.1%

services: 37.6% (2017 est.)

Unemployment rate

23.9% (2017 est.)

22.6% (2016 est.)

Population below poverty line

54.5% (2016 est.)

Gini Index coefficient - distribution of family income

29.4 (2008)

Household income or consumption by percentage share

lowest 10%: 3.8%

highest 10%: 24% (2008)

Budget

revenues: 2.276 billion (2017 est.)

expenditures: 5.328 billion (2017 est.)

Taxes and other revenues

11.2% (of GDP) (2017 est.)

Budget surplus (+) or deficit (-)

-15.1% (of GDP) (2017 est.)

Public debt

7% of GDP (2017 est.)

7.8% of GDP (2016 est.)

Fiscal year

21 December - 20 December

Current account balance

$1.014 billion (2017 est.)

$1.409 billion (2016 est.)

Exports

$784 million (2017 est.)

$614.2 million (2016 est.)

note: not including illicit exports or reexports

Exports - partners

United Arab Emirates 45%, Pakistan 24%, India 22%, China 1% (2019)

Exports - commodities

gold, grapes, opium, fruits and nuts, insect resins, cotton, handwoven carpets, soapstone, scrap metal (2019)

Imports

$7.616 billion (2017 est.)

$6.16 billion (2016 est.)

Imports - partners

United Arab Emirates 23%, Pakistan 17%, India 13%, China 9%, United States 9%, Uzbekistan 7%, Kazakhstan 6% (2019)

Imports - commodities

wheat flours, broadcasting equipment, refined petroleum, rolled tobacco, aircraft parts, synthetic fabrics (2019)

Reserves of foreign exchange and gold

$7.187 billion (31 December 2017 est.)

$6.901 billion (31 December 2015 est.)

Debt - external

$284 million (FY10/11)

Exchange rates

afghanis (AFA) per US dollar -

7.87 (2017 est.)

68.03 (2016 est.)

67.87 (2015)

61.14 (2014 est.)

57.25 (2013 est.)

NOTE: The information regarding Afghanistan on this page is re-published from the 2021 World Fact Book of the United States Central Intelligence Agency and other sources. No claims are made regarding the accuracy of Afghanistan 2021 information contained here. All suggestions for corrections of any errors about Afghanistan 2021 should be addressed to the CIA or the source cited on each page.