The brutal truth is that the Afghanistan crisis will have no impact on the US economy

No one is going to start buying fewer US goods and more Russian and Chinese as a result of the pullout, writes Hamish McRae

Tuesday 24 August 2021 17:10
<p>The US economy is now back to its pre-pandemic size</p>

The US economy is now back to its pre-pandemic size

The political humiliation of the US abroad runs counter to the country’s economic success at home. Why, despite the supposed damage to American prestige, is the dollar decently up on the level of early this month, when prospects in Afghanistan seemed decidedly brighter?

There is a simple explanation. In the brutal calculations that the markets make, Afghanistan does not matter. It is a tiny economy, with the World Bank estimating its GDP at just under $20bn. That is smaller than that of Reading, at £16.4bn or $22.5bn.

So – and it is most uncomfortable to have to acknowledge this – what happens is of huge humanitarian and political significance, but of no economic importance.

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