Content Group 7 of Afghanistan

Fitch Solutions Risk Summary

ECONOMIC RISK

The Covid-19 pandemic has hit the economy significantly in 2020 as trade and transportation have been disrupted and domestic activity has slowed sharply, upending the livelihood of thousands of Afghan families. Border closures and panic buying in Q220 led to a temporary spike in prices of some foodstuffs, which abated after private wholesalers boosted supply at the government’s request. Afghanistan's long-term economic risk is among the highest in the world, but slightly lower than other extremely troubled states, such as South Sudan, Yemen and Syria. The high risk reflects a high degree of volatility in economic growth and other key economic indicators, high inflation and unemployment, very wide fiscal and current account deficits (when foreign assistance is stripped out), and weak financial systems. 

OPERATIONAL RISK

Afghanistan continues to face considerable challenges in rebuilding its economy following long periods of conflict, and the contracts it has signed with mainland China will go some way in providing support for the development of the country's infrastructure. However, the weak security outlook poses risks to foreign involvement in the country.

Source: Fitch Solutions
Date last reviewed: June 6, 2020

Fitch Solutions Political and Economic Risk Indices