Afghan Exodus: Regional Macroeconomic Implications and Policy Challenges

Afghanistan has endured decades of war and political turmoil, leading to repeated waves of displacement (refugees and internally displaced persons) and emigration. This paper documents key stylized facts of the Afghan displacement and emigration crisis, assesses its macroeconomic impacts from a regional perspective using the IMF’s FSGM model, and considers policies to address the crisis. It underscores the need for a holistic and coordinated approach to achieve a durable solution. With international support serving as a critical catalyst, well-designed reforms in both Afghanistan and host countries (Iran and Pakistan) could yield a win-win outcome.