IMF Executive Board Approves a US$220 Million Disbursement to the Islamic Republic of Afghanistan to Address the COVID-19 Pandemic
April 29, 2020
- The IMF Executive Board approved Afghanistan’s request for emergency assistance in the amount of SDR 161.9 million (approximately US$220 million) under the Rapid Credit Facility.
- The pandemic is inflicting heavy damage on Afghanistan’s economy, which is expected to contract sharply in 2020, imperiling the livelihood of a significant segment of the population.
- The authorities are taking emergency measures to contain the pandemic and its immediate social and economic impact.
The Executive Board of the International Monetary Fund (IMF) today approved a disbursement in the amount of SDR 161.9 million (about US$220 million; 50 percent of quota) for Afghanistan under the Rapid Credit Facility (RCF). The disbursement will help meet the urgent fiscal and balance of payments needs stemming from the COVID-19 pandemic, catalyze donor support, and shore up confidence.
The COVID-19 pandemic is inflicting heavy damage on Afghanistan’s economy and has opened a projected US$857 million (4.5 percent of GDP) balance of payments deficit in 2020. The authorities are appropriately boosting critical health spending and rolling out social assistance to households hit hard by the crisis. They have committed to exercise full transparency and good governance in executing pandemic-related spending and to conduct its audit.
The IMF stands ready to provide policy advice and further support to Afghanistan as it battles the pandemic.
Following the Executive Board discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Chair, made the following statement:
“The COVID-19 pandemic has hit hard Afghanistan’s economy. Trade has been disrupted and domestic activity has slowed sharply as measures have been taken to contain the virus. As a result, the economy is set to contract in 2020, leading to a rise in unemployment and poverty.
“The authorities are taking emergency measures to mitigate the economic and human impact of the pandemic. They are ramping up health and social spending with the support of donors and by allowing the fiscal deficit to rise. They are also taking steps to limit fiscal pressures, including nontax measures and curtailing of non-essential outlays and, once the crisis abates, intend to reverse the fiscal deterioration. The authorities have committed to execute pandemic-related spending transparently and with good governance.
“Beyond the immediate response, the authorities are committed to safeguarding macroeconomic stability and promoting inclusive growth. The central bank continues to focus on price stability. The IMF stands ready to assist Afghanistan as it battles the pandemic and to support its economic reforms going forward.
“The shock has generated a large balance of payments need. Emergency financing from the IMF under the Rapid Credit Facility would help meet this urgent need and create room for pandemic-related spending, including by catalyzing donor financing.”
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