Country Report Afghanistan January 2011

Outlook for 2011-12: External sector

Estimates by the IMF suggest that Afghanistan ran a merchandise trade deficit of roughly US$6.3bn in 2009/10, but the trade gap should narrow in the next two years as goods imports slow. (Including grants, the current account will remain close to balance.) The composition of imports will become increasingly dominated by capital goods, many of which will be linked to the development of the Aynak copper deposit, where mining operations are expected to start within the next decade. Substantially higher exports of minerals are therefore possible, but will take many years to be realised. Donor-funded infrastructure projects will also boost imports. The potential for an increase in Afghanistan's traditional exports, such as carpets and dried fruit, is limited, but greater transit trade from Central Asian countries and trade with Iran could provide a boost.

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