Government Debt: Afghanistan has a government debt-to-GDP ratio of approximately - of GDP, with its persistent fiscal deficits being largely covered through inflows of foreign aid. While it is unlikely that the government will face any funding shortages in the near future, a decline in international aid will see the fiscal deficit widen slightly. ...The decline in international aid will place further pressure on the government s fiscal position, resulting in a continued deficit. Government Share Of GDP: Government spending as a share of GDP is low at just --.- of GDP owing to the country s unsophisticated tax system which limits tax revenues, and we forecast this to remain fairly constant through to ----. Meanwhile, the unstable nature of Afghanistan will result in the government facing considerable difficulties in obtaining external borrowing. ...Government Share Of GDP: Government spending as a share of GDP is low at just --.- of GDP owing to the country s unsophisticated tax system which limits tax revenues, and we forecast this to remain fairly constant through to ----.
...Private Consumption: Private consumption made up --.- of GDP in Afghanistan in ----, and this was largely supported by the high level of remittance inflows (USD---mn in ----). This reflects a low savings rate in the economy and shows the underdeveloped nature of the country s economy as it continues to be negatively affected by political instability. ...Private Consumption: Private consumption made up --.- of GDP in Afghanistan in ----, and this was largely supported by the high level of remittance inflows (USD---mn in ----). This reflects a low savings rate in the economy and shows the underdeveloped nature of the country s economy as it continues to be negatively affected by political instability. Over the coming years, we forecast a very gradual decline in private consump- tion relative to GDP, with the figure falling to --.- by ----. ...Fixed Investment: Gross capital formation has been fairly low in Afghanistan for many years, and made up --.- of GDP in ----. A persistently low savings rate owing in part to the - Business Monitor International Ltd www.bmiresearch.com
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