The impact of global geopolitical risk on Afghanistan's economic condition: Evidence from wavelet quantile regression

Abdul Ahmad Pooya

doi:10.55942/jebl.v5i5.566

Authors

Abdul Ahmad Pooya Hunan University

DOI:

https://doi.org/10.55942/jebl.v5i5.566

Keywords:

Afghanistan, Geopolitical Risk, Macroeconomic Performance, Wavelet Quantile Regression

Abstract

This study explores the dynamic effects of global geopolitical risk (GPR) on Afghanistan's macroeconomic performance using data from 1990 to 2024. The results of Wavelet Quantile Regression (WQR) show that GPR shocks have immediate and negative impacts on GDP, the Exchange Rate (EXP), imports (IMP), exports (EXP), and inflation (INF) across all quantiles in the short, medium, and long terms. Notably, the response of GDP per capita to GPR is strong in the short term but diminents over time. Additionally, IMP and EXP are negatively affected by GPR dynamics owing to border closures, sanctions, and disruptions to trade routes in both the short and long terms. The most significant vulnerabilities are revealed in EXP and INF, where persistent depreciation and unstable prices harm household welfare in low-income, import-dependent economies. These findings provide new insights into one of the most fragile nations within the global system and demonstrate the role of the WQR in breaking down multi-scale dynamics often overlooked by linear models. This study underscores the urgent need for Afghanistan to develop adaptation policies that can mitigate short-term shocks, build external buffers, and enable structural reforms, ultimately making the country less vulnerable to long-term geopolitical shocks.

Author Biography

Abdul Ahmad Pooya, Hunan University

Abdul Ahmad Pooya is a third-year Applied Economics student at Hunan University in China and a collaborating member of the Department of Finance and Banking at Badghis University in Afghanistan. His research interests include international economics, development economics, macroeconomics, and the digital economy. He is primarily focused on studying economic vulnerabilities, trade patterns, and policy effects in developing countries. Pooya actively participates in empirical research and data-driven analysis to examine how global economic trends interact with local markets, to contribute to evidence-based policies and sustainable economic growth.

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