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Afghanistan’s contracted economy faces uncertainty: World Bank
The Afghan economy is expected to hover around no-growth territory this year, amid uncertainty after contracting by 25% since August 2021, while Islamic Emirate of Afghanistan’s (IEA) restrictive policies on women’s education and work will further lower the country’s growth prospects, says the World Bank in a report released Tuesday.
The report titled Uncertainty After Fleeting Stability, shows how Afghanistan’s economic downturn has affected all sectors. Services, which make up 45% of the country’s GDP, shrank by 6.5% last year, following a staggering 30% drop in 2021. The agriculture sector, which accounts for 36% of GDP, declined by 6.6% in 2022 due to unfavorable weather conditions and farmers’ lack of resources to cope.
The industrial sector also saw a contraction of 5.7% last year, as businesses—especially those owned by women—faced closures due to limited access to resources and financial challenges. Following a record high in 2022, exports have been declining this year while imports remain robust, resulting in a growing trade deficit, the World Bank said.
Dampened demand, better supply conditions, and a stronger currency caused inflation to sharply decline from its 18.3% peak last July, leading to deflation since April 2023. Although deflation may initially increase real wages, prolonged deflation could stifle business growth and increase unemployment, the bank warned.
A potential reduction in international aid due to fiscal pressures in donor countries and the restrictive policies on women and girls pose risks to Afghanistan’s recovery, as do concerns about stability of the banking sector and dysfunctional payments system, the report said.
“Afghanistan’s economy is fragile, relies heavily on external support and its private sector is weak,” said Melinda Good, World Bank Country Director for Afghanistan. “To recover, the country needs to prioritize spending on human capital, basic services and climate resilience and address harmful gender policies.”
According to the World Bank’s latest Afghanistan Welfare Monitoring Survey, also released Tuesday,one in two Afghans remain poor and recent gains in welfare have come at the cost of possibly exhausting all coping strategies and household resources.
Since the economic crash of 2021, households report an improvement in their capacity to meet basic needs, but deprivation and vulnerability remain high. Afghan households have mobilized extra labor to make ends meet, mainly among youth and women. The overall increase in labor supply has outpaced demand, doubling unemployment.
While improved security has increased primary school attendance and narrowed gender and rural-urban gaps, millions of primary-school-age girls and boys remain out of school mainly due to a lack of access. Since the ban on female secondary school attendance was imposed, only 3% of girls attend secondary school. Among boys aged 13-18, only 44% are receiving a secondary education, World Bank said.
“Afghanistan’s future growth potential hinges on improving human capital. What is happening to secondary education is a cause of grave concern,” added Good. “Almost no girls and less than half of the country’s boys are getting a secondary education. Where will the teachers and doctors of tomorrow come from? A country cannot grow if it willingly foregoes the potential of its citizens.”
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High-level Kyrgyz delegation arrives in Kabul
The Ministry of Industry and Commerce announced on Tuesday that a high-level delegation from Kyrgyzstan has arrived in Kabul.
According to the ministry’s statement, the purpose of the delegation’s visit is to expand economic cooperation and increase trade and investment between Kyrgyzstan and Afghanistan.
The statement added that during the visit, the Kyrgyz delegation will meet with officials of the Islamic Emirate of Afghanistan and participate in the Trade Communication Conference as well as bilateral meetings.
The delegation will also visit industrial facilities and various enterprises operating in Afghanistan.
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Russia calls for broad engagement with Afghan authorities
Russia has urged the international community to adopt a comprehensive and non-politicized approach toward Afghanistan, emphasizing dialogue, regional cooperation, and practical support to stabilize the country and prevent further security deterioration.
Speaking at a recent UN Security Council meeting, Russia’s Permanent Representative, Vassily Nebenzia, said that contrary to Western predictions following the withdrawal of foreign troops, Afghanistan did not collapse. He argued that despite ongoing sanctions, Afghan authorities are making efforts to address long-standing challenges and pursue regional cooperation aimed at building a self-reliant state, though he acknowledged the process would take time and require international support.
Nebenzia said Russia continues to back the UN Assistance Mission in Afghanistan (UNAMA) and supports initiatives such as the Doha Process, which promotes engagement with the Islamic Emirate and Afghanistan’s gradual reintegration into global affairs. He stressed that constructive dialogue with the Afghan authorities is essential and warned against what he described as pressure, ultimatums, or sanctions-driven approaches, saying these could harden positions and undermine UN efforts on the ground.
The Russian envoy said regional players, including members of the Shanghai Cooperation Organization (SCO) and the Collective Security Treaty Organization (CSTO), share the view that engagement is the only viable path forward.
He also called for progress on unfreezing Afghan assets and expanding development assistance, warning that failure to do so could lead to a further drawdown of the UN presence in the country.
On security, Nebenzia expressed concern about ongoing terrorist threats, particularly from Islamic State Khorasan Province (ISKP), also known as Daesh, noting that the group continues to receive external funding and recruit foreign fighters, including individuals with combat experience from Syria and Iraq.
He also raised alarm over uncertainty surrounding weapons left behind by NATO forces and warned of the growing production of synthetic drugs, which he said is closely linked to terrorism.
Nebenzia said Russia supports dialogue between Afghanistan and Pakistan amid rising tensions linked to militant activity, urging both sides to expand cooperation, especially on counterterrorism.
He also highlighted the worsening socio-economic situation in Afghanistan and praised humanitarian agencies for continuing their work despite funding cuts. Russia, he said, remains engaged in providing assistance and expanding cooperation with Afghanistan in political, security, and economic fields.
The Russian envoy reiterated Moscow’s support for the rights of all Afghans and the formation of an inclusive government, calling for respect for fundamental freedoms, including access to education and employment, without discrimination.
Nebenzia concluded by urging the UN to engage with Afghanistan’s “real authorities” to help resolve the country’s challenges and support its reintegration into the international community.
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Afghanistan’s public health minister begins official visit to India
Afghanistan’s Minister of Public Health, Noor Jalal Jalali, has embarked on an official visit to India at the invitation of the Indian government, leading a delegation from the ministry.
In a statement, the Ministry of Public Health said the visit is aimed at strengthening health cooperation between the two countries, promoting the exchange of expertise, and coordinating joint health programs.
During the trip, Jalali is expected to hold meetings with Indian officials, particularly those from the health sector, and take part in a series of pre-arranged engagements.
Discussions will focus on capacity building for Afghan health workers, the import of standard medicines to Afghanistan, access to medical equipment, and other areas of cooperation.
The ministry said the visit is intended to open a new chapter in health collaboration between Afghanistan and India, with a focus on improving healthcare services and professional development.
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