Political Instability Clouds Afghanistan's Growth Outlook Says IMF

(MENAFN- Qatar News Agency) Shington may 22 (qna) - the international monetary fund (imf) says political instability regional security dynamics and slow application of policies cloud islamic republic of afghanistan's growth outlook despite enormous progress.

in its latest report on the country the imf says growth prospects "remain clouded by considerable downside risk" although the country has moved forward in reconstruction development and per capita income.



however the report cites adverse domestic political instability inadequate implementation of economic policies and donor fatigue clouds its prospects. these uncertainties over the last two years and the pull-out of international troops and weak institutions continue to constrain afghanistan's growth.

"these uncertainties reduced confidence and discouraged private investment. growth slowed from 14% in 2012 (boosted by a bumper harvest) to an estimated 3.6% in 2013. inflation was 5.6% year-on-year in march 2014" says the imf report.



regarding afghanistan's 2014 prospects in post hamid karzai era with the country going in for elections in less than a month and a half the imf says "the outlook should be positive assuming smooth political and security transitions continued reform and donor financing." large security and development expenditure needs and a limited domestic revenue capacity mean that afghanistan will remain dependent on donor financing for an extended period.



in addition to donor support macroeconomic stability structural reforms and political and security stability are needed to ensure durable and inclusive growth. risks to the outlook are mostly on the downside the report said.

on the measures afghanistan needs to take to boost its economy imf directors stress finalising a fiscal regime for natural resources sector enacting vat law swiftly and reaching domestic revenue targets. (qna)