AFGHANISTAN ECONOMIC

MONITOR
THE WORLD BANK AUGUST 23, 2022

SUMMARY: Global food and energy prices continue to impose upward pressure on basic household prices in Afghanistan. Work availability for
skilled workers increased marginally in July; however, for unskilled workers, it has declined slightly from its peak in May 2022. Total revenue
collection for the first eight months of the current fiscal year is at par with pre-August 2021 levels, however, with a greater reliance on trade-
related taxes and non-tax revenue sources. Since end-June 2022, the Afghani has depreciated against major currencies; as of Aug 11, 2022, it
is trading close to 89.91 AFN per USD, 4.2 percent below its August 15, 2021 value. Recent data (July 2021-June 2022) from Pakistani
authorities shows that Afghanistan now has a trade surplus of US$79 million.
Prices of basic food and fuel items rose significantly in June 2022. Increasing global energy and food prices (about half of the country’s
imports) and the impact of the drought on agriculture continue to drive inflation in Afghanistan. In July 2022, except for the price of high-
quality wheat flour, which declined by around four percent, prices increased for: (i) diesel (26 percent), (ii) high-quality rice (3 percent), (iii)
sugar (5.5 percent), and (iv) bread (3 percent) resulting in 43.4 percent year-on-year (y-o-y) inflation for basic household goods1—a slight
decline in percentage point increase from 50 percent in June. Recently published National Statistics and Information Authority (NSIA) price
statistics for June 2022 shows headline consumer price index inflation at 17.5 percent, mainly driven by 26 percent Y-o-Y inflation in the
food segment. Non-Food segment Y-o-Y inflation for June 2022 was recorded at 8.7 percent. Survey data shows a general availability of
basic food and non-food items in the markets2.
The Afghani (AFN) depreciated against major currencies in the last six weeks. Data issued by the Da Afghanistan Bank (DAB) show that,
between the end-June and mid-Aug, the AFN depreciated by 2.4 percent against the United States dollar (USD), 2.3 percent against the
Chinese yuan, and 0.7 percent against the Indian Rupee. However, AFN gained by 1.9 percent against Euro and 2.1 percent against the
Pakistan Rupee). The last USD auction by DAB was held on March 23, 2022. In the absence of central bank liquidity management, the Money
Service Providers (MSPs) continue to report some foreign exchange shortages in the open market as the Interim Taliban Authorities (ITA) are
trying to exert more robust controls in the foreign exchange market, including by regulating the MSP sector3 and prohibiting the use of foreign
currency (for example, to buy or sell a house, apartment, or other commodities and in housing rental transactions).
Cash withdrawals from banks remained regulated for both firms and individuals. Individual withdrawal of both USD and AFN and
businesses withdrawal of USD remains almost the same as last month, although still below statutory limits. However, AFN withdrawals by firms
are reported to have declined by 22 percent in July compared to June 2022. Firms still report that the accessibility is much lower than the
allowed limit.
Work availability for unskilled workers declined slightly in July. In a relatively unchanged environment, work opportunities are primarily
seasonal and dependent on agriculture. With the end of the harvest season in most of the country, demand for non-skilled labor has declined.
This includes some of the provinces in the southern and central regions of the country, such as Helmand, Kandahar, Wardak, etc. In some south-
eastern provinces, unskilled labor demand increased in July 2022 compared to the previous month.
Revenue collection surpassed last year’s performance. As of August 16, 2022, overall revenue collection reached AFN 100 billion since
December 22, 2021, compared to AFN 98.8 billion last year. Taxes at borders continue to contribute higher than in-land revenues, reaching
AFN 57 billion (or 57 percent of the total). Reflecting a compressed economy, revenue from in-land sources reached AFN43 billion (or 43
percent of the total), of which revenue from non-tax sources remains the highest. Revenue from ministries is AFN 22.7 billion, of which more
than AFN 5.8 billion are from the Ministry of Mines and Petroleum, mainly from coal mining and exports. Revenues from provincial offices
totaled AFN 7.4 billion in FY1401 compared to AFN 8.6 billion in FY1400. Revenues from tax sources continue to fall short of previous years.
Total revenue from LTO, MTO, and STO reached AFN 13.6 bn as of August 06 compared to AFN 26 billion last year.
Afghanistan registered a merchandise trade surplus with Pakistan. The Q2-2022 trade data from Afghan Authorities is not available yet.
However, mirror trade data for July 2021 to June 2022 from Pakistan authorities shows that Afghanistan has a trade surplus of more than
US$ 79 million. From July 2021 to June 2022, total imports to Pakistan from Afghanistan were US$ 796.4 million, while Pakistan’s exports to
Afghanistan were US$ 717 million. The exports are driven by mineral fuel, oils, and products, including the recent surge in coal exports. Other
Afghan export items are textile and food items such as fruits and vegetables. Afghanistan’s main imports from Pakistan are food products,
followed by pharmaceutical products and wood.

1
Index constructed by the World Bank, using the weekly prices of 11 basic food and fuel items collected by the World Food Program (WFP).
2
Data collected by the Third Party Monitoring Agent (TPMA) from 48 markets in 21 provinces.
3
MSPs in Kabul, Mazar Sharif, Herat, Kandahar, Kunduz, and Nangarhar are required to have AFN 30 million to obtain a license. In other areas of
Afghanistan, the requirement is AFN 10 million.
Issue #8/2022 THE WORLD BANK
AFGHANISTAN ECONOMIC MONITOR
1. PRICE CHANGES AND AVAILABILITY OF BASIC HOUSEHOLD GOODS
Increased food and fuel prices drive headline and basic household goods inflation.
1.1. OVERALL CONSUMER PRICE INDEX 1.2. INFLATION Y-O-Y

180 Overall Index Food Non-Food Headline inflation Food Non-food

170
30
160
25
150 20
140 15
130 10
5
120
0
110
-5
100
-10
Mar-19

Mar-20

Mar-21

Mar-22
Jul-19

Jul-20

Jul-21
Sep-19
Nov-19

Sep-20
Nov-20

Sep-21
Nov-21
May-19

May-20

May-21

May-22
Jan-19

Jan-20

Jan-21

Jan-22

Jul-19

Jul-20

Jul-21
Apr-21
Apr-19

Apr-20

Apr-22
Jan-19

Oct-19
Jan-20

Oct-20
Jan-21

Oct-21
Jan-22
Source: NSIA.

1.3. BASIC HOUSEHOLD GOODS – Y-O-Y INFLATION

Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22
Bread 7.5 6.2 7.8 8.6 8.7 10.2 11.6 12.0 14.9 18.1 22.0 23.2
Fuel (diesel) 86.7 48.8 79.4 94.2 97.9 95.1 68.8 73.2 57.3 66.3 95.3 112.5
Oil (cooking) 51.8 58.5 70.1 64.5 55.5 62.3 47.3 43.9 46.4 50.3 51.3 32.3
Pulses 4.6 3.8 9.4 13.3 14.8 28.7 27.6 24.1 23.8 22.9 23.7 23.3
Rice (high quality) 7.2 8.5 6.6 7.6 9.4 18.8 21.9 19.8 19.3 24.0 34.2 37.8
Rice (low quality) 9.6 9.5 5.8 4.8 8.1 14.3 10.1 9.6 7.9 9.6 14.6 13.1
Salt 12.5 12.2 8.4 13.4 14.1 30.2 25.2 23.4 18.9 21.3 22.9 19.0
Sugar 7.5 12.5 21.2 24.2 25.7 35.3 27.1 24.7 24.4 26.0 33.9 37.0
Wheat 11.6 14.2 26.6 27.3 26.7 40.2 31.0 27.8 35.5 40.3 58.1 49.8
Wheat flour (high quality) 10.2 15.6 28.3 26.7 27.7 42.2 27.6 31.6 44.0 50.5 65.1 49.4
Wheat flour (low quality) 10.7 14.4 30.2 29.0 29.6 45.1 32.3 32.1 44.7 52.7 68.2 50.8
Basic Household Goods Price Inflation 20.4 21.6 31.9 32.0 32.0 42.5 32.0 32.2 36.6 41.6 51.7 43.4
Source: Price data from WFP weekly report; index constructed by World Bank staff.
Note: This Index uses WFP price data for ten critical household goods from all provinces. It applies consumption and population weights from NSIA to provide an aggregate
snapshot of basic household inflation trends.

Data from 48 markets in 21 provinces suggest that most basic food and non-food items remain available.
1.4. REPORTED AVAILABILITY OF FOOD ITEMS 1.5. REPORTED AVAILABILITY OF NON-FOOD ITEMS
Mar-22 Apr-22 May-22 Jun-22 Jul-22 Mar-22 Apr-22 May-22 Jul-22 Jul-22
100% 100%
80% 80%
60% 60%
40% 40%
20% 20%
0% 0%

Source: Survey data collected by the World Bank’s Third Party Monitoring Agent.

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AFGHANISTAN ECONOMIC MONITOR
2. LABOR MARKET CONDITIONS
Nominal wages are slowly recovering but still lower than the pre-August 2021 levels. However, real wages have
declined due to high inflation.
2.1. DAILY WAGE FOR SKILLED AND UNSKILLED WORKERS (AFN) 2.2. NOMINAL AND REAL WAGES (AFN)

Nominal Wage(unskilled labour) Nominal Wage (Skilled labour) Nominal Wage(unskilled labour) Nominal Wage (Skilled labour)
700.0 Real wage (unskilled labour) Real wage (skilled labour)
700
600.0
600
500.0
500
400.0
300.0 400

200.0 300
100.0 200
0.0
100
Mar-22
Jul-21

Sep-21

Jul-22
Nov-21
Jun-21

Jun-22
Aug-21

Dec-21

Feb-22

Apr-22
May-22
Oct-21

Jan-22

Jul-21

Jul-22
May-21

Jan-22

May-22
Jun-21

Nov-21

Jun-22
Aug-21

Apr-22
Oct-21

Dec-21

Mar-22
Sep-21

Feb-22
Source: Wage data from WFP, World Bank Staff elaboration. Real wages are calculated using price data from the NSIA. The inflation date for June is projected.
Note: Real wages to January 2022 are calculated based on CPI inflation reported by NSIA. Real wages for February and March are calculated based on CPI estimates prepared
by the World Bank.

Demand for skilled labor has marginally improved in July following three months of stagnation while that for un-skilled
declined. This is likely due to the completion of the agriculture harvest season.
2.3. LABOR DEMAND FOR SKILLED AND NON-SKILLED WORKERS BETWEEN JANUARY 2022 AND JULY 2022
Skilled labor Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22
6

5
Days per week

0
Badghis

Khost

Nuristan
Kabul
Daykundi

Helmand

Herat
Balkh

Farah

Kunar
Ghazni

Kunduz

Paktika

Panjshir

Sar-I-Pul
Badakhsh

average
Faryab

Kandahar

Nangarha

Wardak
Uruzgan

National
an

Un-skilled labor Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22

6
5
Days per week

4
3
2
1
0
Farah

Ghazni

Helman

Khost

Uruzgan
Badghis

Daykun

Nangar

Sar-I-Pul
Faryab

Nuristan

Wardak
Herat

Kabul

Kandah

Kunar

Kunduz

Paktika

National
average
Badakhs

Balkh

Panjshir
har
han

ar
di

Source: Survey data collected by the World Bank’s Third Party Monitoring Agent.
Note: Data reflect the number of available workdays reported by skilled and unskilled casual workers seeking work. Skilled workers are: (i) carpenters, (ii) electricians, (iii) masons,
(iv) painters, (v) plumbers, and (vi) tile workers.

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AFGHANISTAN ECONOMIC MONITOR
3. REVENUES
ITA collected AFN 100 billion as of Aug 16, 2022. Overall revenue collection exceeded what was collected last year, however,
falling short of the year before during the same period, with a higher concentration on trade and non-taxes sources now.
3.1. TOTAL REVENUE COLLECTION—CUMULATIVE (AFN BILLIONS)

2019 2020 2021 Avg 2022

240.00
200.00
160.00
120.00
80.00 100.2

40.00
-
M1 - Jadi M2 - M3 - Hoot M4 - M5 - Sawr M6 - Jawza M7 - M8 - Asad M9 - M10 - M11 - M12 -
Dalwa Hamal Saratan Sunbula Meezan Aqrab Qaws

Source: Ministry of Finance.

Note: The Afghan solar calendar month, Jadi, runs from December 21-January 20.

3.2. SEVEN-MONTHLY REVENUE COLLECTED AT THE BORDER (AFN BILLIONS) 3.3 PERCENT SHARE OF COLLECTIONS AT BORDER CROSSINGS
2022 2021 2020 2019
Avg 2022 Avg 2021 Avg 2020 Avg 2019
10 2022 2021 2020 2019

8 35%

30%
6
25%
4 20%

15%
2
10%
0
5%
M1 - Jadi M2 - Dalwa M3 - Hoot M4 - M5 - Sawr M6 - Jawza M7 -
Hamal Saratan 0%
Herat Nangarhar Nimroz Kandahar Balkh Others
Source: Ministry of Finance. Source: Ministry of Finance.

3.4 SEVEN-MONTHLY INLAND REVENUE COLLECTION (AFN BILLIONS) 3.5 PERCENT SHARE OF ARD COLLECTIONS FROM SOURCES
2022 2021 2020 2019
2022 2021 2020 2019
Avg 2022 Avg 2021 Avg 2020 Avg 2019
20
30

15 25

20
10
15

5 10

5
0
M1 - Jadi M2 - Dalwa M3 - Hoot M4 - M5 - Sawr M6 - Jawza M7 - 0
Hamal Saratan Ministries LTO Mustofiats MTO STO

Source: Ministry of Finance. Source: Ministry of Finance.

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AFGHANISTAN ECONOMIC MONITOR
4. FOREIGN EXCHANGE AND FINANCIAL MARKET OPERATIONS
Since the end-June 2022, the AFN has depreciated against the USD, Chinese Yuan, and Indian Rupee.
4.1. EXCHANGE RATE - INDEX JULY 2021 (HIGHER = DEPRECIATION)

AFN/Euro AFN/PKR AFN/INR AFN/IRT AFN/USD AFN/CY

160
150
140
130
Index (31 July = 100)

120
110
100
90
80
70
60
10/11/2021
10/19/2021
10/27/2021

11/12/2021
11/20/2021
11/28/2021

12/14/2021
12/22/2021
12/30/2021
8/8/2021

8/24/2021
9/1/2021
9/9/2021

1/7/2022

2/8/2022

3/4/2022

4/5/2022

5/7/2022

6/8/2022

7/2/2022

8/3/2022
7/31/2021

8/16/2021

9/17/2021
9/25/2021
10/3/2021

11/4/2021

12/6/2021

1/15/2022
1/23/2022
1/31/2022

2/16/2022
2/24/2022

3/12/2022
3/20/2022
3/28/2022

4/13/2022
4/21/2022
4/29/2022

5/15/2022
5/23/2022
5/31/2022

6/16/2022
6/24/2022

7/10/2022
7/18/2022
7/26/2022

8/11/2022
Source: Data from Da Afghanistan Bank, World Bank staff elaboration.
4.2. EXCHANGE RATE – DEPRECIATION BY CURRENCY SINCE END-JULY 2021
15- 30-Aug- 30-Sep- 28-Oct- 28-Nov- 27-Dec- 1-Feb- 28-Feb- 31-Mar- 27-Apr- 29-May- 29-Jun- 28-Jul- 11-Aug-
Aug-21 21 21 21 21 21 22 22 22 22 22 22 22 22
AFN/Euro -3.78 -7.48 -8.64 -9.96 -12.82 -17.54 -15.96 -8.99 -3.91 0.24 -2.13 4.16 6.65 6.15
AFN/PKR -2.95 -7.78 -0.56 -0.30 -4.92 -9.37 -10.34 -2.60 0.92 5.19 8.97 18.88 40.73 21.38
AFN/INR -7.23 -7.73 1.41 -3.01 -6.24 -9.01 -11.17 -0.16 1.61 3.36 1.63 10.55 9.05 9.74
AFN/IRT 3.13 3.13 2.17 0.00 0.00 -5.71 -10.81 -8.33 -5.71 0.00 3.13 10.34 10.34 10.34
AFN/USD -8.02 -9.90 -10.96 -12.84 -17.14 -23.69 -21.31 -13.68 -10.48 -7.81 -11.13 -1.87 -3.98 -4.19
AFN/CY -2.96 -12.05 -0.34 -7.67 -11.80 -21.55 -17.25 -9.15 -7.42 -0.70 -8.84 -0.32 -2.33 -2.58
Source: Data from DAB and World Bank Staff calculations.
Money Service Providers continue to report foreign currency shortages.
4.3. AVAILABILITY OF FOREIGN EXCHANGE ACCORDING TO MONEY SERVICE PROVIDERS
Adequate Limited Unavailable
100%
80%
60%
40%
20%
0%
US Dollars

US Dollars

US Dollars

US Dollars

US Dollars
Pakistani Rupees

Iranian Tomans

Pakistani Rupees
UAE Dirhams

Iranian Tomans

Pakistani Rupees
UAE Dirhams

Iranian Tomans

Pakistani Rupees

Pakistani Rupees
UAE Dirhams

Iranian Tomans

UAE Dirhams

Iranian Tomans

UAE Dirhams

March April May June July

Source: Survey data collected by the World Bank’s Third Party Monitoring Agent by visiting 144 MSPs in 48 markets in the country.
Note: Includes banks, hawala operators, and informal currency exchangers.

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AFGHANISTAN ECONOMIC MONITOR
Firms still report the inability to withdraw AFN and USD funds from bank accounts, even up to regulated limits.
4.4. WEEKLY WITHDRAWALS - INDIVIDUALS (AFN) 4.5. WEEKLY WITHDRAWALS – INDIVIDUALS (USD)

Reported amount able to be withdrawn in AFS Reported amount able to be withdrawn in USD
Regulated limit in USD
Regulated limit in AFS 400
30,000 350

25,000 300
250
20,000
200
15,000 150
10,000 100
50
5,000
0
0

Source: Survey data collected by the World Bank’s Third Party Monitoring Agent.
Note: Regulated limit as stipulated by DAB. Reported amount able to be withdrawn as reported by individual respondents to the Third Party Monitoring Agent survey.
4.6. MONTHLY WITHDRAWALS - FIRMS (AFN MILLIONS) 4.7. MONTHLY WITHDRAWALS – FIRMS (USD)
Reported amount able to be withdrawn in Million AFS Reported amount able to be withdrawn in USD
Regulated limit in AFS 30,000
3.0 Regulated limit in USD

2.5 25,000

2.0 20,000
Million Afs

In USD

1.5 15,000

1.0 10,000

0.5 5,000

0.0 -

5. TRADE DEVELOPMENTS
Pakistani authorities’ data for July 2021-June 2022 shows that Afghanistan registered a trade surplus with Pakistan
owing to strong coal, textile, and food exports.
5.1. AFGHANISTAN’S EXPORTS TO PAKISTAN –JULY 2021-JUNE 2022 (USD 5.2: AFGHANISTAN’S IMPORTS FROM PAKISTAN–JULY 2021-JUNE 2022
MILLIONS) (USD MILLIONS)
300 250
250 200
200 150

150 100

100 50

50 0

-
Mineral Cotton Edible fruit Vegetables Salt; Iron and Ores, slag Other
fuels, oils and nuts plastering steel and ash
and materials
products and cement

Source: Pakistan Authorities. Source: Pakistan Authorities.

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AFGHANISTAN ECONOMIC MONITOR

Data notes: The Afghanistan Economic Monitor is produced by World Bank staff, drawing from a range of data sources. Reflecting the
limited data availability, data sources and coverage may vary between editions. Data sources are cited for each chart. The Afghanistan
Economic Monitor uses data from the following sources: (i) official statistics on prices produced by the National Statistics and Information
Authority (NSIA); (ii) data on prices and wages collected from all provinces by the World Food Program; (iii) data on the availability
of foreign exchange and cash collected from 22 provinces by the World Bank’s Third Party Monitoring Agent; (iv) data on exchange
rates collected and reported by Da Afghanistan Bank; and (v) data on trade from the NSIA.

For analytical products on Afghanistan, kindly visit https://www.worldbank.org/en/country/afghanistan.

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