Afghanistan Development Update, May 2017
The Afghanistan Development Update, which is published twice a year, provides a comprehensive report of the state of the Afghan economy. It covers recent economic developments and outlines the medium-term outlook for Afghanistan. Afghanistan. Each...
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| Language: | English en_US |
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Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/471191495626000119/Afghanistan-development-update http://hdl.handle.net/10986/27550 |
| Summary: | The Afghanistan Development Update,
which is published twice a year, provides a comprehensive
report of the state of the Afghan economy. It covers recent
economic developments and outlines the medium-term outlook
for Afghanistan. Afghanistan. Each edition includes a
section that provides in-depth analysis on one or more
specific focus topics. The lack of high-frequency data in
Afghanistan makes it difficult to track economic activities
on a monthly or quarterly basis. Thus, proxy indicators are
utilized when their quality is deemed satisfactory. Efforts
are made to ensure that key analysis and forecasts are based
primarily on reliable sets of data. The Afghanistan
Development Update is intended for a wide audience,
including policy makers, the donor community, the private
sector, the community of analysts and professionals engaged
in monitoring the economy and Afghanistan’s citizens at
large. In this issue of the Update, the Focus Section
discusses how economic stimulus can be provided in
Afghanistan’s resource-constrained environment. In the
context of the economic slowdown, Afghanistan faces the
difficult dilemma of balancing measures to stimulate the
economy while at the same time avoiding a further weakening
of its fiscal position. The fiscal space is already
extremely limited, with no room to increase public
expenditure or to lower taxes. Thus, the Government must
implement initiatives to maximize the growth impact of
fiscal expenditure. First, policies to encourage government
spending on non-tradable goods from local suppliers will
ensure that demand taps domestic production, rather than
imports. Second, policies to improve absorptive capacity
will increase the quality, speed of execution and value for
money of public investments. Third, policies to promote
contestable markets in banking and construction will
stimulate the entry of small and medium-sized firms in both
sectors. Fourth, polices to increase fiscal space should
include measures to improve revenue mobilization and to use
existing resources more effectively, which will release
additional resources. |
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