The Kabul Tribune (KT) — Disruptions to regional trade routes and Afghanistan’s reliance on alternative corridors are putting pressure on domestic markets, while global commodity price fluctuations and geopolitical uncertainty continue to pose risks to price stability, the World Food Program said in its latest monthly report.
The WFP said Afghanistan’s markets are highly vulnerable to
regional trade disruptions because the country relies heavily on imports for
major food and non-food items. Rising global commodity prices and higher
transportation costs are adding to the pressure on prices and household
budgets.
The impact is particularly significant for low-income
households, which spend a large share of their income on essential goods and
have limited ability to absorb sudden price increases, the report said.
Afghanistan’s economy continues to record modest growth,
supported by domestic demand and the return of large numbers of Afghans.
Agriculture, industry and services have all contributed to economic activity.
However, the pace of economic recovery remains insufficient
to keep pace with population growth, limiting improvements in per capita income
and household purchasing power, according to the WFP.
Limited income opportunities, widespread poverty,
subsistence insecurity and gaps in access to basic services continue to
constrain household resilience and reduce families’ ability to cope with
food-price increases, employment disruptions and other market shocks.
Afghani Strengthens
The Afghani strengthened modestly against the U.S. dollar in
August, with the monthly average exchange rate reaching 65.4 Afghanis per
dollar.
The currency was 4.5% stronger than a year earlier and 12%
stronger than its three-year average, supporting relative exchange-rate
stability and providing some protection against imported inflation.
The WFP said, however, that the benefit was partly offset by
higher transportation costs, market instability and elevated international
commodity prices.
Inflation Remains Elevated
Inflationary pressures remained high. Headline inflation
reached 7.5% year-on-year in July 2026, while food inflation stood at 7%.
Non-food inflation was higher at 7.9%, driven by continued
increases in health care, housing and transportation costs.
The WFP said continued pressure from import and
transportation costs, together with elevated housing and health care expenses,
is contributing to sustained increases in household living costs.
Fuel and fertilizer prices rise
Diesel prices increased 3.3% in August to 76.7 Afghanis per
liter, standing 15% higher than a year earlier, according to the report.
Agricultural input costs also remained elevated. Urea
fertilizer prices were 35% higher than a year earlier, while diammonium
phosphate, or DAP, was 15% higher.
The higher fertilizer and fuel costs are adding to
production expenses for Afghanistan’s farmers and putting further pressure on
the cost of economic activity.
