October 13, 2017

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.

• Implementation of the authorities’ program supported by the Extended Credit Facility (ECF) remains satisfactory.
• The authorities’ reform program supported by the ECF sets out a structural reform agenda focused on institution building, fiscal and financial sector reforms, and measures to combat corruption.
• The support of the international community will remain vital in the years ahead as the country navigates the difficult path toward self-reliance.

An International Monetary Fund (IMF) team led by Christoph Duenwald visited Baku from September 27 to October 7, 2017 to conduct discussions for the 2017 Article IV consultation and the second review of Afghanistan’s economic program supported by a three-year IMF ECF arrangement.

At the end of the visit, Mr. Duenwald issued the following statement:

“Following productive discussions, we are happy to announce that the IMF team and the Afghan authorities reached a staff level agreement on the completion of the second review under the ECF arrangement subject to approval by the IMF’s Executive Board. The Board is expected to discuss the 2017 Article IV consultation and the second review under the ECF arrangement in December. Upon completion of this review, SDR4.5 million (about US$6.1 million) will be made available to the country’s central bank.

“Afghanistan’s economic outlook, clouded by a challenging security environment, points towards continued subdued growth and modest inflation. Growth is expected to reach 2.5 percent in 2017, rising gradually thereafter, contingent on improvements in security and continued external assistance. Meanwhile, inflation should average around 5.5 percent this year. The overall fiscal balance, including donor grants, is forecast to remain broadly balanced over the medium term. Large trade deficits continue to be financed by substantial grants, allowing for international reserves to remain at comfortable levels.

“The authorities’ reform program supported by the ECF sets out a structural reform agenda focused on institution building, fiscal and financial sector reforms, and measures to combat corruption. These measures will lay the foundation for scaled up private sector development, higher inclusive growth, and job creation. Staff found performance under the ECF to have been satisfactory with all end-June performance criteria and most of the structural benchmarks having been met.

“The team commended the authorities for good implementation of the reform program, despite difficult circumstances, and discussed follow up actions that would help move the reform agenda forward. The staff team reached understandings with the Afghan authorities on the main objectives of the economic program for 2018.

“The IMF will remain closely engaged with the Afghan authorities to support economic policy design and implementation of economic reforms. The support of the international community will remain vital in the years ahead as the country navigates the difficult path toward self-reliance.

“The team would like to take this opportunity to thank the authorities for the candid and constructive discussions.”