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28Q3FY1395.Pdf I II III ,EQH6LQD :DWW .DEXO $IJKDQLVWDQ 7HOHSKRQH ,QWHUQHW ZZZGDEJRYDI (PDLO PS#GDEJRYDI $OO ULJKWV UHVHUYHG 5LJKWV DQG SHUPLVVLRQV 7KH PDWHULDO LQ WKLV SXEOLFDWLRQ LV FRS\ULJKWHG EXW PD\ EH IUHHO\ TXRWHG DQG UHSULQWHG $FNQRZOHGJHPHQWLVUHTXHVWHGWRJHWKHUZLWKDFRS\RIWKHSXEOLFDWLRQ 1RWH $IJKDQLVWDQಬV)LVFDO\HDUKDVEHHQFKDQJHGHIIHFWLYHIURP 7KHQHZILVFDO\HDUEHJLQVRQ 'HFHPEHUHDFK\HDU7KLV4XDUWHUO\%XOOHWLQDQDO\]HVGHYHORSPHQWVLQWKHVHFRQGTXDUWHURIILVFDO \HDUZKLFKFRYHUV-XQHVWWR6HSWHPEHUVW IV CONTENTS EXECUTIVE SUMMARY ............................................................................................................................ XIV GLOBAL ECONOMIC ENVIRONMENT ..................................................................................................... 18 I. ADVANCED ECONOMIES ........................................................................................................ 18 1.1.1 The United States Economy ......................................................................................... 18 1.1.2 The Economy of United Kingdom ................................................................................ 20 1.1.3 The Economy of Germany ............................................................................................ 21 1.1.4 The Economy of France ................................................................................................ 21 1.1.5 The Economy of Japan .................................................................................................. 22 II. EMERGING MARKET ECONOMIES ...................................................................................... 23 1.2.1 The Economy of China .................................................................................................. 23 1.2.2 The Economy of India ................................................................................................... 24 1.2.3 The Economy of Turkey ............................................................................................... 25 MONETARY AND CAPITAL MARKET DEVELOPMENT ....................................................................... 29 I. MONETARY PROGRAM........................................................................................................... 29 II. MONETARY AGGREGATES ................................................................................................... 31 III. NET INTERNATIONAL RESERVE ................................................................................ 32 IV. FROEIGN EXCHANGE MARKET .................................................................................. 33 V. OPEN MARKET OPERATION & LIQUIDITY CONDITIONS ............................................. 33 2.5.1 Foreign Exchange Auction............................................................................................ 33 2.5.2 Capital Note Auction ..................................................................................................... 34 2.5.3 Required and Excess Reserves ...................................................................................... 34 INFLATION TREND AND OUTLOOK ....................................................................................................... 39 I. CONSUMER PRICE IN AFGHANISTAN ................................................................................. 39 3.1.1 Developments in National Headline CPI ..................................................................... 40 3.1.2 Developments in Kabul CPI .......................................................................................... 43 II. NEAR TERM INFLATION OUTLOOK .................................................................................... 47 EXTERNAL SECTOR DEVELOPMENTS ................................................................................................... 51 I. BALANCE OF PAYMENTS ....................................................................................................... 51 4.1.1 Current Account Balance ................................................................................................... 51 4.1.2 Capital Account .................................................................................................................. 52 4.1.3 Financial Account ............................................................................................................... 52 4.1.4 Merchandise Trade ............................................................................................................ 53 II. DIRECTION OF TRADE ........................................................................................................... 53 III. COMPOSITION OF TRADE ............................................................................................ 55 4.3.1. Composition of Imports .................................................................................................... 55 4.3.2. Composition of exports ..................................................................................................... 56 IV. EXTERNAL DEBT ............................................................................................................ 57 V. NET INTERNATIONAL RESERVES........................................................................................ 58 FISCAL DEVELOPMENTS ........................................................................................................................... 66 I. BUDGET EXECUTION RATE.................................................................................................. 66 II. BUDGET DEFICIT .................................................................................................................... 66 III. REVENUE COLLECTION ................................................................................................ 66 5.3.1 Tax Revenue ....................................................................................................................... 67 V 5.3.2 Non-tax Revenues .............................................................................................................. 68 IV. GRANTS ............................................................................................................................ 68 V. EXPENDITURE .......................................................................................................................... 69 BANKING SYSTEM PERFORMANCE ........................................................................................................ 73 I. ASSETS OF THE BANKING SYSTEM ..................................................................................... 74 6.1.1 Gross Loans ........................................................................................................................ 75 6.1.2 Loan Loss Reserves ............................................................................................................ 76 6.1.3 Distribution of Credit ........................................................................................................ 76 II. CLASSIFICATION OF LOANS .................................................................................................. 78 6.2.1 Non-performing loans ........................................................................................................ 78 6.2.2 Adversely-classified loans .................................................................................................. 78 6.2.3 Loans classified Watch ...................................................................................................... 79 6.2.4 Loans classified loss ........................................................................................................... 79 6.2.5 Interbank Claims ................................................................................................................ 79 6.2.6 Investment .......................................................................................................................... 80 6.2.7 Cash in Vault and Claims on DAB ..................................................................................... 80 III. LIABILITIES...................................................................................................................... 80 6.3.1 Deposits .............................................................................................................................. 80 6.3.2 Borrowings.......................................................................................................................... 82 IV. LIQUIDITY ....................................................................................................................... 82 6.4.1 Liquidity Ratio (broad measure) ....................................................................................... 83 V. CAPITAL ..................................................................................................................................... 83 VI. PROFITABILITY .............................................................................................................. 83 IV. FOREIGN EXCHANGE RISK........................................................................................................... 86 VII. INTEREST RATE RISK .......................................................................................................... 86 VI LIST OF FIGURES )LJXUH7KH86*'3*URZWK5DWH&KDQJHVHDVRQDOO\DGMXVWHGDWDQQXDOUDWH )LJXUH7KH86&3,IRUDOO8UEDQ&RQVXPHUVRQHPRQWKSHUFHQWDJHFKDQJHVHDVRQDOO\DGMXVWHG )LJXUH7KH86,QWHUQDWLRQDO7UDGHLQ*RRGVDQG6HUYLFHV
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