Business
Afghanistan faces economic strains following a ‘series of shocks’ last year
These pressures have driven an estimated 11 percent population increase in the fiscal year 2025, largely due to returning migrants, the World Bank stated.
Afghanistan’s fragile economy is grappling with a series of shocks that intensified in 2025, according to a World Bank economic update report released on Wednesday.
The report noted that Afghanistan has been hit by reduced foreign aid, prolonged crossing closures along the disputed Durand Line with Pakistan, natural disasters, and a significant return of refugees from Iran and Pakistan.
These pressures have driven an estimated 11 percent population increase in the fiscal year 2025, largely due to returning migrants, the World Bank stated.
While Afghanistan’s aggregate GDP grew by around 4.8 percent last year, reflecting a rebound in nonagricultural activity and private consumption, the growth has not kept pace with population expansion. As such, per capita GDP contracted by 5.6 percent, as rising inflation and higher trade and transport costs eroded living standards.
“The influx of returnees has temporarily boosted domestic demand, but also places additional strain on labor markets, housing, and social services,” the report noted.
Looking ahead, Afghanistan’s economy is projected to grow by 4.0 percent in 2026, driven by strengthening domestic demand, higher private investment, and improved absorption of returnees into the workforce. However, the report warns that ongoing conflict in the Middle East and disruptions to trade routes, particularly the 60 percent of Afghan trade that passes through Iran, pose significant risks.
“Border closures or sudden surges in returnees could further depress per capita incomes and fuel inflation,” the World Bank said. Trade rerouting may mitigate some effects, but the country remains vulnerable to regional instability.
Despite these challenges, analysts highlight that modest growth and ongoing private-sector activity offer some hope for recovery. The World Bank emphasizes that sustained economic resilience will depend on peace, stable trade corridors, and the ability to productively integrate returning populations into the labor market.
Afghanistan’s experience underscores the broader regional pressures in the Middle East, North Africa, Afghanistan, and Pakistan (MENAAP), where conflict and humanitarian crises continue to ripple through economies, affecting inflation, trade, and social stability.
Business
Afghanistan, Kuwait explore new investment and trade opportunities
The Afghan Embassy in Kuwait said the talks focused on Afghanistan’s security and stability, economic potential and available investment opportunities.
Afghanistan and Kuwait have discussed expanding trade and investment cooperation during a meeting between Afghanistan’s Chargé d’Affaires in Kuwait, Mohammad Shafiq Khatib, and prominent Kuwaiti investor Ajeej Khalaf, along with a number of businessmen and investors.
The Afghan Embassy in Kuwait said the talks focused on Afghanistan’s security and stability, economic potential and available investment opportunities.
The sides stressed the importance of strengthening trade and economic ties and expanding investment cooperation between the two countries.
Khatib invited Kuwaiti businessmen and investors to visit Afghanistan, explore investment opportunities and consider investing in various sectors of the Afghan economy.
The meeting comes as Afghanistan seeks to attract more foreign investment and strengthen economic and commercial ties with regional and international partners.
Business
Azizi: Afghanistan ready to attract Chinese and Uzbek investment
On the sidelines of the conference, Azizi and his delegation visited an exhibition showcasing Uzbek products and manufactured goods.
Afghanistan is ready to attract investment from Chinese and Uzbek companies across key sectors of the economy, Minister of Industry and Commerce Nooruddin Azizi said at a trade conference in Uzbekistan’s Termez.
Speaking at the Surkhandarya–China Trade Conference, Azizi said recent exchanges between Afghan, Uzbek and Chinese officials and business delegations had opened new opportunities for trade, transit and investment.
He described China as a key economic partner and an important player in strengthening regional connectivity, while emphasizing the need to increase Afghan exports to regional markets, particularly China.
Azizi said Afghanistan was prepared to facilitate investment by Chinese and Uzbek companies in mining, agriculture, food processing, energy, manufacturing, machinery and economic infrastructure.
He also called for the development of new transit corridors linking Central Asia with China, saying Afghan exports could be transported through Uzbekistan’s trade networks to China and other regional markets.
The minister said joint investment and the processing of Afghanistan’s raw materials inside the country could create sustainable and mutually beneficial economic opportunities across the region.
Officials from Afghanistan, Uzbekistan and China, as well as private-sector representatives, attended the conference.
Balkh Governor Mohammad Yousuf Wafa highlighted the longstanding friendly relations between Afghanistan and Uzbekistan and the investment opportunities available in Balkh province.
On the sidelines of the conference, Azizi and his delegation visited an exhibition showcasing Uzbek products and manufactured goods.
Business
Uzbekistan, Kazakhstan target Afghanistan in push to expand regional trade
According to Uzbek media, the initiative was discussed during the Uzbek-Kazakh Business Forum in Tashkent.
Uzbekistan and Kazakhstan are seeking to deepen economic cooperation and jointly expand into new regional markets, including Afghanistan, as part of broader efforts to strengthen trade and investment across Central Asia and the Middle East.
According to Uzbek media, the initiative was discussed during the Uzbek-Kazakh Business Forum in Tashkent, where business leaders and trade associations from both countries explored opportunities to promote their products in third-country markets, particularly Afghanistan, Syria and Iraq.
Afghanistan featured prominently in the discussions, with participants noting that Kazakhstan’s exports to Afghanistan reached nearly $500 million during the first seven months of 2025—almost matching the country’s total exports to Afghanistan for all of 2024. Officials said the long-term goal is to increase exports to $3 billion.
The forum also highlighted growing imports of mineral raw materials from Afghanistan. Participants discussed a proposed agreement to supply Afghan zinc ore to the Almalyk Mining and Metallurgical Complex in Uzbekistan.
Beyond Afghanistan, delegates examined emerging business opportunities in Syria and Iraq, where reconstruction efforts are expected to drive demand for food products, construction materials and industrial goods.
The forum also focused on improving regional logistics. Officials discussed using available capacity on Turkish freight trucks transiting Uzbekistan, a move expected to reduce transport costs and improve access to regional markets.
At the conclusion of the forum, both sides agreed to organise joint business missions to third-country markets, including Aleppo, Syria, in late September and Erbil, Iraq, in early October, with the aim of strengthening commercial partnerships and identifying new investment opportunities.
The discussions reflect growing economic cooperation between Uzbekistan and Kazakhstan as both countries seek to expand regional connectivity, diversify exports and strengthen trade links with neighbouring markets, including Afghanistan.
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