Afghanistan, queues at banks in Kabul

Economic crisis in Afghanistan skyrockets food prices by 50%

Public services barely function in Afghanistan, civil servants do not receive their salaries, and one in three Afghans is starving.

The economic crisis in Afghanistan, exacerbated by the hasty departure of thousands of foreigners and Afghans after the Taliban takeover of Kabul, has skyrocketed food prices by up to 50%, and at least one in three Afghans is starving, according to the United Nations.

“We are not going to be able to provide basic food because (at the end of September) we are going to run out of stocks; and to maintain the current demand (for food), we need at least 200 million dollars just for food, to be able to feed the most vulnerable people,” Ramiz Alakbarov, United Nations humanitarian coordinator and vice special representative for Afghanistan of the UN Secretary General, explained to the press in Kabul.

Alakbarov also warned that at least a third of Afghanistan’s population lacks food security and has no prospects that their situation will improve; one of the causes is that the crisis and instability in the country have triggered food prices by 50%, and fuel prices by up to 75%. The United Nations representative assured that the country’s public services have problems to continue operating, adding that public employees are not receiving their salaries.

On Tuesday, United Nations Secretary General Antonio Guterres said that Afghanistan faces an imminent “humanitarian catastrophe” since the Taliban took control of the country. “A humanitarian catastrophe is looming… Amid a severe drought, and with harsher winter conditions approaching, additional food, shelter and medical supplies must be urgently shipped to the country as soon as possible,” Guterres said in a statement.

Afghan economy to barely grow this decade

A recent report by Fitch Solutions already confirmed the dire situation that Afghanistan if facing due to the collapse of its economy, noting that it is likely to rapidly collapse and sink by 9.7% this year, with a forecast drop of at least 5.2% in 2022. Previously, Fitch had forecast the Afghan economy to grow at 0.4% in 2021.

In the long term, the economic crisis in Afghanistan does not seem to have any signs of improvement: Fitch affirms in its report that between 2023 and 2030 the country’s economy will grow on average no more than 1.2% per year, a figure very far from the 6% rate at which Afghan GDP grew between 2002 and 2020, and concludes that only massive foreign investment in the country will improve the economic prospects for Afghanistan.