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IMF says Afghanistan economy will shrink 30% this year

AT News

KABUL: Afghanistan economy will face a huge blow this year which could fuel a refugee crisis impacting its neighbouring countries, Turkey and Europe, said the International Monetary Fund on Wednesday.

Millions will be pushed into poverty as Afghanistan economy will slump by up to 30% this year – which could also cause a humanitarian crisis, the fund warned.

It said Afghanistan’s neighbours would be further hit because they rely on its funds for trade.

Bordering Tajikistan has said it can’t afford to take in many more refugees.

With foreign assets frozen and most non-humanitarian aid halted, inflows of cash to Afghanistan have all but dried up.

In its regional economic outlook, the fund said: “A large influx of refugees could put a burden on public resources in refugee-hosting countries, fuel labour market pressures, and lead to social tensions, underscoring the need for assistance from the international community.”

IMF estimates that if there were to be a million more, hosting them would cost Tajikistan $100m (£72m), Iran $300m and Pakistan $500m.

Last month Tajikistan said it could not afford to take in large numbers of refugees unless it received international financial assistance while other Central Asian nations have said they have no plans to host refugees.

Nearby countries will also be hurt by the loss of Afghanistan as a major trading partner.

The IMF also warned there are concerns that funds going into the country may be used to finance terrorism and launder money.

Last week, members of the G20 group of major economies pledged to put billions of dollars into the Afghan economy to avert an economic catastrophe.

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