"The survey, conducted in October-November 2021, finds that the economic activities were substantially affected, and the private sector was hit hard," the World Bank said in a media release on Thursday.
The majority of surveyed businesses reported a drastic decline in consumer demand for their products and services and have been forced to scale back operations, reduce investments, and lay off employees.
One in three surveyed businesses reported having temporarily ceased operations since August 2021, while those that remained operational expressed the need to adjust their operations to cope with declining demand.
Small businesses have been hit harder – 38 percent of surveyed small firms had temporarily shut down, as compared to 25 percent of medium firms and 35 percent of large firms.
Women-owned businesses are more vulnerable to the negative impacts of the political crisis – of the surveyed women-owned firms, 42 percent had temporarily closed compared to 26 percent of firms owned by men.
82 percent of firms that participated in the survey reported a decline in demand – this finding aligns with the reduced household incomes and declining purchasing power reported in the recently-published Afghanistan Welfare Monitoring Survey.
The agribusiness and wholesale and retail trade sectors appear to be more resilient to shocks – more than 80 percent of survey respondents in these sectors have remained either fully or partially open.
Job losses
Surveyed businesses of all sizes and sectors have cut jobs, laying off more than half of their employees, on average.Women employees in surveyed businesses faced more severe job losses than men employees – overall, three-quarters of women workers were laid off from surveyed firms since August 2021.
"Most firms are adopting a 'wait and see' approach to decide on their future operations and investments," the World Bank said.
"Some firms expect to be forced to shrink further and may even have to exit the market," it stated.
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