The Afghan economy, under Taliban rule since 2021, grapples with severe challenges, with over half of the population now living below the poverty line, as per the World Bank.
In January 2024, inflation hit a record high of 10.2%, adding strain to citizens already facing financial difficulties. Afghanistan saw a substantial decline in exports by $32.9 million and imports by $99.2 million between February and March 2024, according to the Taliban National Statistics and Information Authority.
A significant blow to the economy comes from an anticipated 87% drop in coal exports by 2024, as projected by the World Bank.
Unemployment has surged to alarming levels, exacerbating the economic crisis. The country faces a daunting $3.5 billion trade deficit due to falling exports and rising imports.
Economist Azrakhsh Hafizi links part of Afghanistan’s economic decline to Pakistan’s failure to export coal and engage in imports from Central Asia via Afghanistan.
The depreciation of the Afghan currency against major currencies deepens economic instability, with significant drops observed against the US dollar, euro, Chinese yuan, Indian rupee, and Pakistani rupee.
The decline in Pakistan’s food exports from Afghanistan, coupled with a 76% overall drop in exports in 2023, as per the State Bank of Pakistan, exacerbates Afghanistan’s economic challenges.
Furthermore, a 50% decrease in electricity imports from Uzbekistan results in power shortages in Afghanistan, according to Ariana News.
Border disputes contribute to reduced trade between India and Afghanistan, while strained relations with neighboring countries pose significant hurdles to the Taliban regime.
Analysts point to the Taliban’s support for terrorist organizations as a factor in Afghanistan’s dire economic situation, leading to increased regional terrorism, as reported by Al Jazeera.
Experts caution that instead of investing in citizen welfare, the Taliban redirects resources to support groups like ISIS-K and TTP, perpetuating regional instability.
ISIS-K, responsible for a terrorist attack in Moscow, gains ground in Afghanistan. There are concerns that development aid is diverted to fund terrorist activities.
