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Afghanistan economic update (English)

Uncertainty surrounding the political and security transition in Afghanistan has led to a slowdown in economic growth in 2013, following strong growth in 2012. After a decade of strong fiscal performance, revenue collection has weakened in 2013, potentially delaying Afghanistan's path toward self-reliance. In order to preserve fiscal sustainability, a concerted effort will be required going forward to improve revenue mobilization by strengthening tax and customs administration and by expediting introduction and implementation of the planned value-added tax. Afghanistan faces considerable expenditure needs in the areas of security, infrastructure development, service delivery, and operations and maintenance. Meeting these needs will also require significant grant assistance for the foreseeable future. In spite of the transition-related uncertainty and underperformance, Afghanistan will need to stay focused on its medium term structural reform goals. These include: (i) safeguarding sustainability by mobilizing revenue and securing grant assistance; (ii) supporting inclusive and job-creating post-transition growth by unlocking the potential of the agriculture and natural resource sectors and by tapping the potential of regional integration; (iii) improving upon the low levels of human capital and skills; and (iv) continuing to strengthen institutions and governance. This report is organized as follows: section one gives recent economic developments; section two presents economic outlook and medium term prospects; and section three presents structural policies for the medium term.


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    Joya,Mohammad Omar, Khan,Faruk

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    South Asia,

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    Afghanistan economic update

  • Keywords

    horticulture and livestock;private investment;poverty impact of growth;decline in tax revenue;gdp growth rate;public financial management system;fragile and conflict state;sources of tax revenue;tax and customs administration;current account balance;investment climate;official exports;Agriculture;natural resource sector;Exchange Rates;Foreign Exchange Reserve;medium term growth;operations and maintenance;decline in revenue;flexible exchange rate;extractive industry sector;lack of security;long-term fiscal sustainability;public expenditure need;political economy risk;development policy;incentives for investment;quality at entry;natural resource curse;trade license;terms of policy;economic sector work;social and environmental;financial market development;open market operation;growth in agriculture;price of imports;low tax rate;risk management module;increase tariff;ministries of health;current account deficit;capacity of farmer;investments in education;private sector activity;employment in agriculture;small-scale mining activity;income from capital;loss in revenue;access to finance;impact of mine;eligibility for incentive;domestic labor market;investments in infrastructure;consumer price inflation;international commodity price;skills and education;foreign direct investment;sale of good;import of goods;source of revenue;Access to Electricity;public investment expenditure;public credit;public service delivery;Rule of Law;tax incentive;Tax Holiday;broad money;domestic revenue;fiscal incentive;human capital;reserve money;security environment;transition period;agricultural growth;Job Creation;banking sector;political transition;satisfactory progress;financing need;budget financing;fresh fruit;money growth;security spending;regulatory oversight;military base;trade deficit;trade balance;capital flight;Capital Inflows;fiscal performance;retail trade;public policy;security situation;agricultural sector;weather condition;opium production;telecom sector;Financial Sector;agricultural production;cereal production;economic slowdown;budget execution;oil seed;regulatory environment;rural area;international reserve;construction permit;extension service;indian rupee;property registration;external review;donor meeting;military spending;tax base;animal byproduct;contract enforcement;investment protection;improve revenue;Property tax;small family;monetary aggregate;Tax Administration;international security;social outcome;pakistani rupee;inclusive growth;governance environment;rich economy;energy transit;direct participation;marginal improvement;transit trade;food price;supply chain;domestic investor;demographic shift;binding constraint;bottom quintile;poor irrigation;customs revenue;enrollment rate;Tax Code;administering tax;administrative burden;mining development;mining infrastructure;pay taxes;trade agreement;fixed tax;raising income;improving customs;consumer spend;information externality;broad consensus;basic metal;empirical evidence;soft infrastructure;steel mill;industrial sector;preferential credit;project datum;adverse incentive;fruit exports;customs department;employment impact;real gdp;political uncertainty;security forces;manufacturing sector;subsidized land;national account;amu darya;small mining;public loan;steel rods;additional revenue;heavily dependent;license holder;broadband subscribers;capital formation;nominal anchor;transportation sector;real growth;agriculture sector;equitable development;good governance;macroeconomic sustainability;Aid Dependent;fruit production;expenditure increase;animal by-products;product category;fiscal cost;high trade;import increase;grant financing;lost revenue;budget development;Real estate;business service;transportation service;air travel;iron ore;investment exposure;commercial bank;risk perception;donor grant;international aid;investor confidence;macroeconomic framework;legislative framework;federal level;review procedures;transparent manner;investment portfolio;fiscal revenue;secure financing



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Joya,Mohammad Omar Khan,Faruk

Afghanistan economic update (English). Afghanistan economic update Washington, D.C. : World Bank Group.