IMF Staff Completes Fifth ECF Review Mission for Afghanistan

March 25, 2019

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
  • IMF team and the Afghan authorities reached staff-level agreement on the completion of the fifth review under the ECF arrangement.
  • The Afghan authorities have continued to implement their economic reform program, with notable progress in fiscal management and financial sector reforms.
  • Determined reform efforts and policy discipline will be critical in this election year, as will sustained donor support.

An International Monetary Fund (IMF) team led by Christoph Duenwald visited Dubai during March 13–20, 2019 to conduct discussions on the fifth review of Afghanistan’s economic program supported by a three-and-a-half-year Extended Credit Facility (ECF) arrangement. At the end of the mission, Mr. Duenwald issued the following statement:

 

“Following productive discussions, the IMF team and the Afghan authorities reached staff-level agreement on the completion of the fifth review under the ECF arrangement. The agreement is subject to approval by the IMF Executive Board, which is expected to consider the staff report for the fifth ECF review in late May 2019. Upon completion of this review, SDR 4.5 million (about US$ 6.1 million) will be made available to Afghanistan, bringing total disbursements to SDR 27 million.

 

“Afghanistan’s GDP growth for 2018 is estimated at 2.7 percent, slightly above earlier staff estimates, as the industrial sector’s performance more than compensated for the drought-related weakness in agriculture. Growth is projected to pick up to 3 percent in 2019 as agricultural production recovers. Inflation is expected to average 1.8 percent in 2019. Donor grants continue to finance large budget and trade deficits, allowing treasury cash balances and international reserves to remain at comfortable levels.

 

“The team discussed with the Afghan authorities implementation of the economic reforms supported by the ECF. The program sets out a structural reform agenda to lay the foundations for scaled up private sector development and higher inclusive growth, with a focus on building institutions; implementing fiscal and financial reforms while safeguarding social and other priority spending; and measures to combat corruption. The team commended the authorities for prudent macroeconomic management and for achieving progress under challenging circumstances, and discussed follow-up actions that would help move the reform agenda forward.

 

“Afghanistan continues to face formidable challenges, with the precarious security situation hurting confidence and growth. The ongoing peace negotiations hold the promise of an eventual resolution of the longstanding conflict but must solve complex issues faced by the negotiating parties. In the meantime, continuing reform-oriented policies supported by donor grants and capacity development remains necessary. In view of the ECF’s strong catalytic role and in line with Afghanistan’s commitments at the November 2018 Geneva donor conference, the Afghan authorities indicated their interest in a successor arrangement when the current one expires at the end of this year. 

 

“The IMF remains a key partner to Afghanistan, including through technical assistance and training. We will continue to actively engage in a dialogue with the authorities on their reform program with the aim of maintaining macro-financial stability, reinvigorating growth, and building a healthy economy to benefit all Afghans.”
IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Randa Elnagar

Phone: +1 202 623-7100Email: MEDIA@IMF.org