As a result, the fiscal year ending 2009 had GDP growth rebounding to approximately 15%. In fact, harvesting experienced the largest recorded growth in more than three decades. While the GDP dropped by 10% because of changes in opium crops, it remains a primary source of income for a large number of farmers, particularly those involved with drug trafficking. Another change was seen with a downward trend for inflation, which included lower global prices for food and some degree of recovery for domestic crops. Looking at the entire year of 2009, the rate was a negative 13%, which was a huge drop from 43% the previous summer. The focus of the central bank in Afghanistan has been on controlling inflation while also looking for seamless exchange rate volatility.
To achieve the goals set for the GDP in 2010, the central bank is now increasing use of 28-day capital notes along with buying and selling foreign exchange with market dealers. This coupled with the central bank’s promotion of a secondary market for the notes to help develop a foundation of controlling reserve money, as well as monetary policy via open-market operations should product vast improvement. Today, Afghanistan maintains a floating exchange rate, which has seen some improvement from fiscal year ending 2009 taking it to approximately AF50/$1, closing a five-year average in actual effective terms. Even revenue collection has seen great improvement as Afghanistan’s government started controlling expenditures, aligning a budget with the Afghanistan National Development Strategy’s objectives for sustainable growth and macroeconomic stability, and adopting a framework for medium-term fiscal that could be sustained.
The need for tighter levels of spending on security has been recognized, which could be accomplished through operating the budget through domestic revenue that was initially slated for the fiscal year 2015, which will probably move to fiscal year 2023. Currently, Afghanistan’s deficit, not including grants, is expected to expand from $6.4 billion to $7.0 billion, which would account for almost 54% of the country’s GDP. The Afghanistan GDP (Gross Domestic Product, Current Prices, US Dollar) the for fiscal year 2010 is forecasted to reach moderate levels to 7.6%, based on several assumptions. For instance, assumptions would include slow improvement in security, sustained agricultural production, ongoing growth of businesses that serve increased consumer demand, and better revenue administration. Additionally, assumptions would cover ongoing large development funding for projects through projects, and increased foreign direct investment to help develop mineral resources. For the monetary policy, the goal is to keep inflation in check to 8.4% and 4.5% within the forecasting period, pending nothing globally develops unexpectedly.
Although Afghanistan has received tremendous financial support from the United States and other foreign partnerships, as well as private donors unemployment still lingers around 40%. This means that today, the Afghanistan population of 25 million people living in Afghanistan have no work, forcing more than 50% of the country’s population to live below the poverty line. The greatest concern with this is that the younger generation is being pushed toward the Taliban where they are provided with daily necessitates and income, affecting the Afghanistan unemployment rate With several endeavors in the works and Afghanistan having natural resources that are currently being used different, it is expected that unemployment rates will improve. In 2008, Afghanistan and China executed a formal contract for copper mining, which was comprised of a $2.8 billion investment and annual income for the Afghan government of $400 million. This endeavor alone is estimated long-term to product 20,000 jobs. This along with the new projects being formed around natural gas and other resources, new banking operations, and the development of private-based investment enterprises is expected to help the high unemployment rate.
The Afghanistan inflation rate is as follows. Average Consumer Prices (Indexed to Year 2000) for Afghanistan in year 2009 is 168.53 (Index, Base Year 2000 = 100) or 2.32%. This makes Afghanistan number 79 in world rankings according to Inflation, Average Consumer Prices (Indexed to Year 2000) in year 2009. The world's average Inflation, Average Consumer Prices (Indexed to Year 2000) value is (Index, Base Year 2000 = 100); Afghanistan is 168.53 more than the average. Projecting Inflation through 2015, Inflation, Average Consumer Prices (Indexed to Year 2000) for Afghanistan in year 2015 is 210.705 or 4.57