Afghanistan’s Ministry of Finance said Wednesday that after a comprehensive assessment of various sectors, the country’s economic situation is in “its normal state”.

According to a statement issued by the ministry, a meeting was convened to assess financial trade, foreign humanitarian aid, the value of the afghani (AFN), and the impact of changes in foreign policies on the economy.

It was found that the import and export process is functioning smoothly, the banking sector remains stable, national revenues are being collected transparently, and essential government expenditures are being made regularly without any delays.

The ministry attributed the decrease in the value of the AFN against foreign currencies, particularly the US dollar, to widespread negative propaganda.

“Overall, all domestic economic factors are maintaining the value of the Afghan currency in a normal state,” the statement read.

Modest recovery

The Afghan economy is showing signs of moderate growth, but still faces significant headwinds, including fiscal constraints, trade imbalances, and a limited capacity for public investment, according to the World Bank’s latest Afghanistan Development Update.

The World Bank stated that Afghanistan has seen a modest GDP growth of 2.7% over the past two years – growth driven by private consumption. The update stated the economy had recouped only about 10% of past economic losses, indicative of the slow and fragile nature of the recovery.

“Afghanistan’s long-term growth prospects depend on tapping into the substantial potential of the domestic private sector and improving the overall business environment,” said Faris Hadad-Zervos, World Bank Country Director for Afghanistan in the update, which was issued last month.

“Key to this is increased investment, providing access to finance to small businesses, and supporting educated and skilled women entrepreneurs so their businesses can thrive. Without this, the country risks prolonged stagnation with limited prospects for sustainable development,” he added.

The World Bank also stated that the partial recovery, coupled with falling food prices, has contributed to a gradual improvement in household welfare.

But most Afghan households continue to struggle to meet basic needs and poverty remains widespread, the report read.