IMF Staff Completes 2019 Article IV and Sixth ECF Review Mission to Afghanistan
October 11, 2019
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.
- Implementation of the authorities’ program supported by the Extended Credit Facility (ECF) arrangement remains satisfactory.
- Reforms to strengthen institutions, deepen financial inclusion, boost the business climate, and fight corruption will be needed to strengthen the economy’s resilience and to harness a peace dividend should that opportunity arise.
- The financial support of the international community remains critical as the country navigates the difficult path toward self-reliance.
An International Monetary Fund (IMF) team led by Christoph Duenwald visited
Dubai from October 3–10, 2019 to conduct discussions for the 2019 Article
IV consultation and the sixth and final review of Afghanistan’s economic
program supported by a 3½ -year ECF arrangement.
At the end of the visit, Mr. Duenwald issued the following statement:
“The Afghan authorities continue to make good progress in implementing
their program supported by the ECF arrangement that expires at the end of
this year. All end-June 2019 performance criteria and end-September
indicative targets were met, and most of the structural benchmarks are on
track to be met by their end-October and mid-November deadlines. The Board
is expected to discuss the sixth review under the ECF arrangement along
with the 2019 Article IV consultation in December. Upon completion of this
review, SDR 5.38 million (about US$7.4 million) will be made available to
Afghanistan, bringing the total disbursements under the arrangement to SDR
32.38 million (about US$44.4 million).
“Insecurity and violence, combined with episodes of political uncertainty
and weather events, have kept Afghanistan’s real GDP growth rate below 3
percent in recent years, insufficient to absorb the large number of labor
market entrants and improve living standards. Growth is expected to reach 3
percent in 2019, rising gradually thereafter, contingent on a gradual
improvement in security, political stability, and continued external
assistance. Inflation should average around 2.6 percent this year, rising
to an average of 5 percent over the medium term, consistent with the
central bank’s objective. The overall fiscal balance including donor grants
is forecast to remain broadly balanced over the medium term reflecting the
authorities’ commitment to fiscal discipline. Large trade deficits continue
to be financed by substantial grants, allowing international reserves to
remain at comfortable levels.
“The team commended the authorities for good implementation of the reform
program, despite difficult circumstances. Discussions focused on policies
and reforms that will help deliver the authorities’ objectives of stronger
inclusive growth, self-reliance, and poverty reduction. To this end,
continued macroeconomic policy discipline remains indispensable to underpin
growth and job creation. Reforms to strengthen institutions, deepen
financial inclusion, boost the business climate, and fight corruption will
be needed to strengthen the economy’s resilience and to harness a peace
dividend should that opportunity arise. Such measures will lay the
foundation for scaled up private sector development as the sustained engine
“The IMF will remain closely engaged with the Afghan authorities to support
economic policy design and implementation of economic reforms. The support
of the international community will remain vital going forward as the
country navigates the difficult path toward self-reliance.
“The team would like to take this opportunity to thank the authorities for
the candid and constructive discussions.”
IMF Communications Department
PRESS OFFICER: Randa Elnagar
Phone: +1 202 623-7100Email: MEDIA@IMF.org