The value of Afghanistan’s currency is tumbling, exacerbating an already severe economic crisis and deepening poverty in a country where more than half the population already does not have enough to eat.
The afghani lost more than 11 percent of its value against the United States dollar in the space of a day earlier this week, before recouping somewhat. But the market remains volatile, and the devaluation is already affecting Afghans.
Afghanistan’s economy was already troubled when the international community froze billions of dollars worth of Afghanistan’s assets abroad and stopped all international funding to the country after the Taliban seized power in mid-August amid a chaotic US and NATO troop withdrawal. The consequences have been dire for a country heavily dependent on foreign aid.
Afghanistan was also slated to access about $450m on August 23 from the International Monetary Fund, but the IMF blocked the release because of a “lack of clarity” about the country’s new rulers. Since then, international envoys have warned of a looming economic meltdown and humanitarian catastrophe.
“People have no money and the prices have gone up,” said Sayed Umid, a 28-year-old shopkeeper selling basic food items such as rice, beans and pulses in a main shopping street in the western Afghan city of Herat.
“Since this morning I haven’t had a single customer,” he said. With rent to pay on his shop and home expenses, he worries he can no longer make ends meet.
Khan Afzal Hadawal, former acting governor of Afghanistan’s central bank, said the sanctions on the Taliban and the freezing of Afghanistan’s reserve funds “have put the country’s aid-dependent economy on the verge of full economic collapse, leading to historic depreciation of currency”.
“The development agencies, donors, the international community, the US, all these should help in this crisis,” he said. “We do understand the concerns of the international community but there are mechanisms [that] can help to manage the crisis and to assist the Afghan people.”
According to the United Nations’ World Food Programme, 22.8 million of Afghanistan’s 38 million people already face acute food shortages, and malnutrition in the country is increasing. A combination of the coronavirus pandemic, a severe drought and the Taliban takeover has left many without jobs, and the currency’s sliding value has been pushing up food prices.
Shopkeeper Jafar Agha said the price of a large container of cooking oil was about 700 afghanis three months ago (roughly $8 at the time), but now it costs about 1,800 afghanis (about $18).
“My business has fallen to zero,” he said. “I’m not selling because people have no money … We don’t have any hope for the future.”
In the bedlam of the Herat Money Exchange market, traders frantically check the ever-changing currency rate on their mobile phones as they jostle through the crowd shouting out prices and waving wads of cash.
A Taser-wielding guard keeps the entrance free from the crush, the sound of its sharp clicks enough to send money changers scurrying past into the exchange.
A Taliban fighter guards a street in Kabul, Afghanistan [File: Ali Khara/Reuters]
Wednesday was not a good day for trader Said Nadir. He sold US dollars at a rate of 105 afghanis, but then bought at 113 afghanis to the dollar as the currency began to slide and he is worried it might fall further.
“The situation is very bad. When the price increases, we cannot find dollars,” he said.
In early August, the afghani was trading at about 80 to the dollar, jumping to approximately 90 in October. It briefly spiked from 110 on Sunday to 123 on Monday, before recouping somewhat. On Thursday it was trading at about 100 afghanis to the dollar.
For Farzad Haidari, a 34-year-old who imports and sells women’s shawls and scarves, the currency fluctuations have wreaked havoc on his business.
Importing many of his goods from neighbouring Iran and with rent on his store in a shopping mall in central Herat set in dollars, he has seen much of his income evaporate. If the situation continues and prices keep increasing, he said, he could be forced to close his shop.
“Before, when there was uncertainty because of war, we had our business,” he said. “Now there is security, but we’re losing our business.”
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
