Afghanistan’s inflation hits 10.2% in January: Work Bank

In January 2024, the World Bank reported a big drop in headline inflation, which fell to -10.2 percent compared to the previous year.

The downturn extended beyond headline inflation, with core inflation also slipping into negative territory at -6.5 percent year-on-year. The World Bank expressed concern over this persistent core deflation, highlighting the challenges faced by both private and public sectors in stimulating adequate demand.

While the decrease in prices may provide temporary relief to vulnerable households by reducing living costs, the World Bank cautioned that it could potentially undermine the broader macroeconomy.

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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