SIGAR, the US Special Inspector General for Afghanistan Reconstruction, recently reported that the country’s gross domestic product (GDP) had fallen by about $4 billion since the fall of the previous government and the establishment of the current one.
Report cites modeling estimates of the United Nations Development Program. The United Nations Development Program (UNDP) estimates that Afghanistan’s nominal GDP may fall from $20 billion in 2020 to $16 billion.
The program also warns that Afghanistan’s economic growth will fall by between three and five percent if no immediate reforms are made and they barred women from employment.
According to SIGAR, Afghanistan’s economy plunged into recession in 2021, with the United Nations Development Program (UNDP) and the International Monetary Fund estimating a 20 to 30 percent drop in GDP.
Annual per capita income is estimated to have fallen from $650 in 2012 to $500 in 2020 and is expected to fall to $350 by 2022.
The decline in per capita income and the value of the country’s GDP had begun during the previous government. In 2018, the National Bureau of Statistics and Information announced a $1 billion drop in gross domestic product.
According to the UNDP, unemployment in Afghanistan may almost double from 15.2 percent in 2019 to 29 percent in 2022.
The Asian Development Bank models the worst-case scenario. In this modeling, it can reduce unemployment by up to 40% and household consumption by up to 44%.
The depreciation of the afghani against the dollar has also affected Afghanistan’s economy and the purchasing power of households, SIGAR reported.
SIGAR says that besides increasing pressure on Afghanistan’s limited cash reserves, Kabul also cannot print money. The government of fugitive President Ashraf Ghani had signed a contract with a Polish company to print 10 billion afghanis.