ALMATY, Reuters – Afghanistan’s economic growth is expected to shrink by up to 30% in the coming year. This will likely fuel a refugee crisis which could have repercussions on Europe and Turkey, according to Tuesday’s statement from the International Monetary Fund.

With non-humanitarian aid halted and foreign assets largely frozen after the Taliban seized power in August, Afghanistan’s aid-reliant economy “faces severe fiscal and balance-of-payments crises”, it said in its regional economic outlook update.

The resulting fall in living standards could push millions further into poverty, and lead to humanitarian crises.

Although the IMF did not give any estimates about the potential number of refugees, it stated that the instability in Afghanistan would have important security and economic spillovers into the region.

According to the report, “An influx large number of refugees could place a burden on resources in refugee host countries, fuel labor market tensions, and cause social tensions, underscoring need for international assistance.”

The IMF stated that if a million Afghans fled their home country and settled in foreign countries, it would cost $100 million to host them annually in Tajikistan (0.03% GDP), $300 million in Iran (0.3% GDP) and $500 million in Pakistan (0.2% GDP).

Last month, Tajikistan stated that it couldn’t afford to accept large numbers of refugees without international financial aid. Others in Central Asia have stated that they do not plan to accept refugees.

Trade is another channel by which Afghanistan’s economic woes could impact its neighbors.

According to the Fund, exports from Afghanistan have a macroeconomic and social significance for Iran and Pakistan as well Turkmenistan and Uzbekistan.

Afghanistan used to be a source for cash dollars via legitimate and illicit cross-border flows. It was a beneficiary country of large donor funds. But, now, more money in dollar notes could flow into Afghanistan because of its current shortages.

They are most likely to be exchanged for goods that raise concerns about money laundering or the financing of terrorist activities, it said.