UN Says Afghanistan Faces 'unprecedented' Economic Shock

(@FahadShabbir)

UN says Afghanistan faces 'unprecedented' economic shock

Kabul, Dec 1 (UrduPoint / Pakistan Point News - 2nd Dec, 2021 ) :Afghanistan's GDP could contract 20 percent within a year, the UN predicted in a new report on Wednesday, saying that the withdrawal of international aid after the Taliban's return to power is an "unprecedented fiscal shock." For decades now Afghanistan's economy has been undermined by war and drought.

But it was propped up by billions in international aid -- much of which was frozen when US-led international forces withdrew and the Taliban returned to power in August.

"The sudden dramatic withdrawal of international aid is an unprecedented fiscal shock," United Nations Development Programme (UNDP) Asia Director Kanni Wignaraja told AFP on Wednesday, as the agency released its Afghanistan Socio-Economic Outlook 2021-2022.

The report predicts an economic contraction of around 20 percent of GDP "within a year, a decline that could reach 30 percent in following years.

" "It took more than five years of war for the Syrian economy to experience a comparable contraction. This has happened in five months in Afghanistan," Wignaraja said.

Another UN source said, "in terms of population needs and weakness of institutions, it is a situation never seen before. Even... Yemen, Syria, Venezuela don't come close."Previously, international aid represented 40 percent of Afghanistan's GDP and financed 80 percent of its budget.

But even reinstating aid now, while crucial, would be a "palliative" move, Wignaraja said, adding that what Afghans need are "jobs, being able to learn, be able to earn and to be able to live with dignity and safety."