Public suffers economically as deflation, unemployment go parallel

KABUL (Pajhwok): The rates of essential items sky rocketed in the post-regime change and Afghani badly depreciated but later Afghani regained its value by 45.5 percent while the rates of essential items declined 30 percent and fuel by 49 percent, Pajhwok Afghan News findings show.

The weekly economic reports of Pajhwok Afghan News reported Afghani value against foreign currencies, the rates of 49-kilogram Kazakh flour, 24-kilogram Pakistani rice, 49-kilogram Indian sugar, 16-litre Malaysian cooking oil, one kilogram of black African tea, one kilogram of green Indonesian tea, one litre of diesel, one litre of petrol and one kilogram of liquefied gas.

Based on weekly economic reports, a general report ranging from August 2022 to August 20204 has been compiled.

On August 15, 2021, the past government led by President Ashraf Ghani was removed and the Islamic Emirate of Afghanistan (IEA) took over.

Afghani value against dollar:

Pajhwok Afghan News findings showed that on July 24, 2021 one US dollar was accounted for 79.7 afs but by December 13, 2021, one Afghani accounted for 130 afs showing a 63 percent depreciation of Afghani against US dollar.

Afghani appreciation and depreciation against US dollar

Afghani against dollar

Date

Statistic showed that after July 24, 2021, Afghani gained 45.5 percent against US dollar and today (Thursday) August 15 the one US dollar is accounted for 70.9 afs.

Abdul Nasir Reshtiya, one the economic affairs experts, about the appreciation and depreciation of told Pajhwok Afghan News: “Well, since Afghanistan’s economy relied on foreign aid, Afghanistan was absolutely dependent on imports, Afghanistan’s production was not very impressive, and there were problems in the export sector. Therefore, Afghanistan imported everything it needed, and this required foreign currency, especially dollars, and the demand for dollars in Afghan markets was very high, and dollars were still being smuggled out of Afghanistan, which affected the value of the dollar and the value It was very loud.”

He added: “Political issues also had its impact; every time there was positive news, the value of the Afghani improved and when there was negative news, its value went down, that is why these problems occurred in the beginning after the transformation.”

But later, cash aid started again and the Da Afghanistan Bank (DAB) also adopted the republican regime policy, DAB injected $40 million in the market every week, which met the market demand and stop the smuggling of dollars out of the country, besides these efforts increase in exports also affected the stability of the Afghani currency and the value of the Afghani rose again, a lot of work has been done and some programs have been put in place.

Essential food items rates:

Pajhwok finding showed on July 24, 2021, 49-kilogram of bag of Kazakh flour accounted for 1,700 afs, 24-kilogram bag of Pakistani rice accounted for 2,350 afs, 49-kilogram bag of Indian sugar accounted for 2,400 afs, 16-litre Malaysian cooking oil accounted for 1,900 afs, one kilogram black African team accounted for 400 afs and one kilogram green Indonesian tea accounted for 350 afs.

But on Jun 4, 022, the price of 49-kilogram bag of Kazakh flour was 2,700 afs, 24-kilogram bag of Pakistani rice 3,100 afs, 49-kilogram bag of Indian sugar 3,850 afs, 16 litres of Malaysian cooking oil 3,000 afs, one kilogram of black African tea 400 afs and one kilogram of green tea 350 afs.

This comes that on August 10, 2024, the prices of 49-kilogram bag of Kazakh flour was 1,550 afs, 24-kilogram bag of Pakistani rice 2,650 afs, 49-kilogram bag of Indian sugar 2,850 afs, 16 litres of Malaysian cooking oil 1,450 afs, one kilogram of black African tea 450 afs and one kilogram of green Indonesian tea 400 afs.

Up and down of essential food items from 2021 till 2023

Referring to the increase and decrease in the prices of essential food items and the impact of Afghani on food prices Abdul Naseer Reshtiya said: “As I mentioned earlier, all the needs of Afghanistan were imported from outside and all the goods and commodities were bought in dollars, when the dollar rate decreases or increases, it has direct effects on the goods and food materials.”

Fuel:

Based on Pajhwok Afghan News weekly report, on July 24, 2021, in Kabul markets the price of one kilogram of liquefied gas accounted for 60 afs, one litre of diesel was 75 afs and one litre of petrol was 57 afs.

Until June 26, 2022, the price of one kilogram of liquefied gas was increased to 76 afs, one litre of diesel was surged to 127 afs and one litre of petrol was surged to 95 afs.

Up and down in fuel prices

Reports showed that by June 9, 2024, the price of one kilogram of liquefied gas declined to 50 afs, one litre of diesel to 63 afs and one litre of petrol to 62 afs.

The collective rate of one kilogram of liquefied gas, one litre of diesel and one litre of petrol on July 24, 2021 was 174 afs but it soared to 298 afs — 71 percent — by July 16, 2022.

Statistic showed that the collective price of fuel related items from July 16, 2022 till August 10, 2024 declined by 41 percent. In this regard Reshtiya said: “In general, petroleum and food materials are strategic goods and are imported from abroad, therefore, whenever the price of the dollar goes down and up, it has its direct effects on the price of goods in the market.”

Undoubtedly, no matter how stable the Afghani currency is and how much the value of the dollar decreases against the Afghani, for the time being it is good for Afghanistan and the Afghan economy, because Afghanistan is an import based country that relies on imports, and the lower the dollar rate, the lower the price of raw and strategic materials, but when a country is an exporter and however low the country’s currency is compared to foreign currencies, they can export to the same extent, like China and other countries.

People hail Afghani stability, deflation:

Najiba Kakar, the resident of Khoshal Khan locality in Kabul, told Pajhwok Afghan News: “If you remember, at the end of the republican regime, as that regime was falling, the prices of raw materials and the value of the American dollar were rising, when the system fell, the value of the dollar was rising day by day against the Afghani, Food prices went up very high and the people’s economy was ruined, so I was personally very worried and thought that the situation was going out of control.”

She added: “With the grace of Allah the IEA controlled the situation, the prices declined and Afghani stabalised against dollar.”

Mohammad Nisar, one of the taxi drivers in Kabul city, said: “At the beginning of the fall of the previous government, the rate of the dollar suddenly went up to 130 afghanis, the price of oil also went up, the economic situation of the people was bad. And the rates were controlled.”

He said if the prices could not control the economic situation would have deteriorated.

He asked the IEA to improve public economic situation and eliminate unemployment because most of the people were unable to purchase essential food items despite decline in prices.

nh