17 Sep 2021
Posted in Business Fundamentals
Discussions around Afghanistan by businesses rise 16% in H1 2021 on account of political turmoil, reveals GlobalData
The prevailing uncertainty around business and trade in Afghanistan due to the ongoing political turmoil fueled a 16% rise in discussions around the country in all filings of the companies during H1 2021 compared to the prior year period, according to the Filing Analytics Platform of GlobalData, a leading data and analytics company.
Rinaldo Pereira, Senior Business Fundamentals Analyst at GlobalData, comments: “Geopolitics is the central theme in 2021 company filings discussing Afghanistan. ‘Economic Instability’ and ‘Armed Conflict’ were the keywords mentioned by several companies in 2021. Firms are wary of risks around doing business in Afghanistan, and the average word count of risk section around the country in the annual and quarterly reports is already up by 53% in 2021* compared to 2020.”
GlobalData revised the country’s economic growth forecast for 2021 to -12.4% in a relatively optimistic scenario, -18.2% in the middle scenario and -22.3% in the worst-case scenario, from its April 2021 forecast of 4.0% growth.
Gargi Rao, Economic Research Analyst at GlobalData, comments: “Even though Taliban dominates the political scenario at present, they will not have access to US$10bn Afghanistan central bank reserves, which is held by the US. With multilateral agencies including EU, the IMF and the World Bank halting funds, it will further deter the growth prospects amid the COVID-19 pandemic.”
Mentions of ‘Investment’ were much lower in H1 2021 over H1 2020. However, the UN has appealed to countries to release funds to Afghanistan. ‘Geopolitics’ was the central theme, and companies from the technology, aerospace & defense, construction, and financial services sectors had the most mentions of Afghanistan in 2021*. While firms from the US and India had the most mentions of Afghanistan, and both countries were significant trade partners.
Mr Pereira concludes: “Afghanistan’s possible relationship with China and Pakistan for investment is doing the rounds in the news. However, few Chinese companies have discussed the country in 2021 filings, and it seems like a topic best avoided for the Mainland’s firms in the wake of Western sanctions. That said, several Pakistan companies discussed Afghanistan in 2021- yet ‘exports’ were mentioned far less compared to 2020 or 2019.”
*Until 8 September 2021