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Afghanistan experiences a 10.2% inflation rate in January, according to the World Bank


Kabul: In January 2024, the World Bank announced a significant decline in headline inflation, dropping to -10.2 percent compared to the previous year. This downward trend extended to core inflation as well, reaching -6.5 percent year-on-year. The World Bank expressed apprehension regarding this ongoing core deflation, emphasizing the difficulties encountered by both private and public sectors in stimulating sufficient demand.

While the decrease in prices may offer temporary relief to vulnerable households by lowering living expenses, the World Bank warned of potential adverse effects on the overall macroeconomic.

Afghanistan’s export sector witnessed a contraction of 5 percent year-on-year in January 2024, totaling $140.5 million, down from $148.1 million the previous January. Notably, food exports to India surged by 22 percent, contrasting with an 18 percent decline in exports to Pakistan.

Pakistan and India retained their positions as the top export destinations, accounting for 45 percent and 34 percent of total exports in January 2024, respectively.

Import trends continued their upward trajectory into January 2024, reaching $830 million, marking a substantial 37 percent increase from $600 million in January 2023.

The afghani (AFN) experienced a noteworthy 27 percent appreciation against the US dollar in 2023, attributed to significant inflows from UN cash shipments amounting to around $1.8 billion and an estimated $2 billion in remittances.

Despite revenue collection falling slightly short of the Taliban administration targets during the first eleven months of FY2024, totaling AFN 189 billion, it represented a 5.6 percent increase from the previous fiscal year, reflecting a modest growth trajectory.

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