(MENAFN- Wadsam) The Asian Development Bank (ADB) has pledged $100 million to support small and medium enterprises impacted by the pandemic.
'We understand that the economic impacts of COVID-19 pandemic will be widespread. To counter these challenges, ADB is preparing a countercyclical support facility of 100 million dollars under its COVID-19 Active Response and Expenditures Support Program,' said Narendra Singru, ADB's Country Director for Afghanistan. 'Given the extensive development needs in Afghanistan, ADB remains committed to supporting Afghanistan's agenda to eradicate poverty and to transform the country into a self-reliant and productive economy.'
Earlier, ADB in its report called Asian Development Outlook (ADO) 2020 forecasted Afghanistan's gross domestic product (GDP) to contract by 5.0% in 2020—a significant downward revision from the ADO 2020 forecast released in April. However, GDP growth is expected to rebound to 1.5% in 2021 subject to an improved situation in the country.
'The COVID-19 pandemic has had significant impact on Afghanistan's economy in the first half of 2020,' said Singru. 'Based on our projections, the economy could witness positive growth next year if the intra-Afghan peace negotiations succeed and bring a speedy political settlement, in addition to stronger commitments from development partners at the upcoming Afghanistan Conference 2020.'
Based on the report, border closures and lockdowns in the major cities disrupted trade and transportation and undermined industry and services in the country. As a result of the crisis household consumption declined, confidence waned, and investment and remittance inflows decreased. These developments are estimated to drive up unemployment, suppress business activity and regional trade, and impact government revenues.
According to Tolo News, at least 30 percent of small businesses with an investment of Afs100,000 ($1,300) to Afs300,000 ($3,900) have severely suffered due to the pandemic.
Meanwhile, Afghan Economy Minister informs of a $560 million support from the government package to help investors counter the impacts of COVID-19. However, the support package is awaiting approval from the High Economic Council led by President Ghani.
MENAFN1909202001760000ID1100823455
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.