Middle East and Central Asia > Afghanistan, Islamic Republic of

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International Monetary Fund. Middle East and Central Asia Dept.
The COVID-19 pandemic has inflicted a heavy economic and social toll, amplifying the challenges of the armed conflict and fragility. Activity contracted sharply, and new external and fiscal financing needs emerged since the approval of the Rapid Credit Facility disbursement. President Ghani and Mr. Abdullah resolved the contested 2019 presidential election in mid-May, and peace negotiations between the government and Taliban started in September. The authorities are seeking renewed support from the international community for Afghanistan’s development and reforms. Donors remain committed but encourage reform implementation and combatting corruption. Aid is likely to decline in the medium term underscoring the need to advance to self-reliance.
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses Islamic Republic of Afghanistan’s Request for Disbursement Under the Rapid Credit Facility. The disbursement will help meet the urgent fiscal and balance of payments needs stemming from the coronavirus disease 2019 pandemic, catalyze donor support, and shore up confidence. 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. Substantial donor financing is urgently needed to help Afghanistan cover these fiscal and external financing needs which could increase further if the pandemic and its economic impact intensify. 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.
International Monetary Fund. Middle East and Central Asia Dept.
This paper presents 2019 Article IV Consultation with Republic of Afghanistan and its Sixth Review Under the Extended Credit Facility Arrangement. Despite difficult circumstances, the Afghan authorities have continued to demonstrate strong commitment to the economic program supported by the Extended Credit Facility arrangement. Given the uncertain outlook dominated by downside risks, policies should focus on maintaining macroeconomic and financial stability and putting the conditions in place for stronger and more inclusive growth, led by the private sector. The authorities have made progress with their self-reliance agenda, yet strong financial support from donors is needed to help Afghanistan stay on the path to greater prosperity. Fiscal policy should continue to target a broadly balanced budget, supported by fair and sustainable domestic revenue mobilization and strong financial support by donors. Resources should shift toward pro-growth and pro-poor outlays and create fiscal space to meet the country’s considerable development needs.
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses Afghanistan’s Fifth Review under the Extended Credit Facility (ECF) Arrangement and Request for Modification of Performance Criteria. The paper highlights that in the face of many headwinds, Afghanistan’s government continues to demonstrate strong ownership of the program supported by the ECF arrangement. The economic outlook is clouded by numerous uncertainties; however, ongoing peace negotiations offer hope for a much-needed improvement in the security situation. The security situation remains strained, but the US-Taliban peace negotiations have improved prospects for a political settlement. External financing should continue to rely on grants and concessional funding. Any scaling up of externally financed public investment should be gradual and preceded by an assessment of macro-fiscal implications and strengthened debt management. Continued reforms remain key to achieving higher and more inclusive growth. Reforms in support of fiscal sustainability, institution building, anti-corruption efforts, and financial stability should continue.
International Monetary Fund

Abstract

The audited consolidated financial statements of the International Monetary Fund as of April 30, 2017 and 2016 include the related consolidated statements of comprehensive income, of changes in reserves, resources, and retained earnings, and of cash flows for the years then ended. The IMF’s financial statements were audited by external auditing firm PricewaterhouseCoopers, LLC, which certified that they were prepared and presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. The standards include the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

International Monetary Fund

Abstract

This paper outlines that the IMF is exposed to various types of operational and financial risks, including credit, market, liquidity, and income risks. The Executive Board of the IMF has overall responsibility for the establishment and oversight of the IMF’s risk management framework. The risk management framework encompasses primarily strategic, financial, and operational risks. As part of this framework, the Advisory Committee on Risk Management (ACRM) has been established to analyze, synthesize, and report on risks. Credit risk on credit outstanding refers to potential losses owing to the failure of member countries to make repurchases. Credit risk is inherent in the IMF's unique role in the international monetary system since the IMF has limited ability to diversify its loan portfolio and generally provides financing when other sources are not available to a member. Measures to help mitigate the IMF's credit risk include policies on access limits, program design, monitoring, and economic policies that members agree to follow as a condition for IMF financing; early repurchase policies; and preventative, precautionary, remedial measures and precautionary balances to cope with the financial consequences of protracted arrears.

International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses economic developments, outlooks, and risks in Afghanistan. The economy is in difficultly. Deepening uncertainty about the political transition following the 2014 presidential election, corruption and weak governance, and a weakening security environment have complicated the implementation of reforms, undermined confidence and economic activity, and contributed to increased emigration. The overall budget had a deficit in 2015 as a shortfall in grants more than offset higher-than-projected revenue and lower spending. The trade deficit remained large, but substantial inflows of foreign aid kept the current account in surplus. The financial sector remains fragile and plays a limited intermediation role.
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses the main features of the Staff-Monitored Program (SMP) for Afghanistan. The SMP is designed to support the authorities’ reform agenda with a framework to address economic vulnerabilities and facilitate engagement with the international community to sustain donor support. The SMP will foster continued close engagement with Afghanistan, address immediate fiscal and banking vulnerabilities, and help manage risks. The SMP will also preserve buffers, maintain low inflation and competitiveness, and lay the basis for high and inclusive growth. Under the SMP, fiscal policy will focus on mobilizing domestic budget revenue to finance projected expenditure and rebuild the treasury’s cash balance.