Latest News
Afghanistan’s economy shows modest growth but recovery remains fragile
The Afghan economy is showing signs of moderate growth, but still faces significant challenges, including fiscal constraints, trade imbalances, and a limited capacity for public investment, the World Bank (WB) said Wednesday.
According to the organization’s latest Afghanistan Development Update, issued on Wednesday, “Afghanistan’s economic recovery remains uncertain”.
Modest GDP growth of 2.7%, driven by private consumption, has recouped only about 10% of past economic losses, indicative of the slow and fragile nature of the recovery, the WB said.
According to the organization, this level of growth has done little to address deeper structural issues and significant vulnerabilities within Afghanistan’s economy.
“Enabling women’s participation in the economy, strengthening domestic resource mobilization, maintaining price stability, and addressing critical deficits in human capital – particularly in education and healthcare, and especially for women – will be essential for long-term recovery and reducing vulnerability to future shocks,” the WB said in a statement.
Faris Hadad-Zervos, World Bank Country Director for Afghanistan said: “Afghanistan’s long-term growth prospects depend on tapping into the substantial potential of the domestic private sector and improving the overall business environment.
“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 said.
Meanwhile, 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.
“Vulnerable groups, including women, children, and displaced populations, continue to bear the brunt of the economic hardship, due to the lack of social protection mechanisms,” the WB stated.
In addition, Afghanistan’s trade dynamics remain a significant challenge.
In 2023-24, the country’s exports remained stable, but imports surged, leading to a widening trade deficit, the WB reported.
The appreciation of the afghani (AFN) made imports cheaper, fueling demand for foreign goods, while domestic industrial activity revived, increasing the need for imported inputs.
However, the trade deficit, exacerbated by Afghanistan’s reliance on imports for essential goods like fuel, food, and machinery, might pose a risk to the country’s economic stability, the organization stated.
Meanwhile, Deputy Minister of Economy Abdul Latif Nazari said that Afghanistan’s economy has a clear outlook and the current problems are caused by sanctions and the freezing of the country’s foreign exchange reserves.
“Afghanistan’s economic outlook is bright and hopeful. Some of the economic problems that exist are due to sanctions, banking restrictions and the freezing of assets of the Afghan people,” Nazari added.
“Our effort is to free the property of the people of Afghanistan as soon as possible and use it in line with the economic growth and development of the country.”
Latest News
Khalilzad calls for end to Pakistan’s ‘double game’, urges new chapter with Afghanistan
“Playing this double game must stop,” Khalilzad wrote, adding that it was time for Afghanistan and Pakistan to “turn a new page.”
Former U.S. Special Representative for Afghanistan Reconciliation Zalmay Khalilzad has called for an end to what he described as Pakistan’s “double game” over its alleged support for militant groups operating in Afghanistan, urging the two neighbouring countries to open a new chapter in their relations.
In a post on X, Khalilzad said he believed the past 30 years had demonstrated a significant gap between Pakistan’s public statements and its actions regarding armed groups involved in fighting in Afghanistan.
Referring to the period of the U.S. military presence in Afghanistan, Khalilzad alleged that Pakistan provided sanctuary and support to militants fighting U.S. and Afghan forces while publicly denying doing so.
“Playing this double game must stop,” Khalilzad wrote, adding that it was time for Afghanistan and Pakistan to “turn a new page.”
He called for greater economic cooperation and development between the two countries and said they should agree not to allow their respective territories to be used to threaten each other’s security.
Khalilzad’s comments come amid renewed tensions between Kabul and Islamabad over cross-border militancy and security allegations.
Pakistan has repeatedly accused the Islamic Emirate of Afghanistan of allowing Tehreek-e-Taliban Pakistan (TTP) and other militant groups to operate from Afghan territory. Kabul has denied providing sanctuary to groups planning attacks against Pakistan.
The dispute has increasingly spilled into military confrontation. Pakistan carried out airstrikes in Afghanistan on September 21, saying it had targeted militant positions, while Afghan officials and the United Nations said three civilians, including a woman and a girl, were killed. Pakistan said the strikes killed 28 militants.
Islamabad has also continued to accuse Kabul of failing to prevent attacks originating from Afghan territory. Pakistani authorities have said their military actions are carried out in response to security threats and in self-defence.
Pakistan, meanwhile, has rejected recent Afghan allegations that its security forces or intelligence agencies were involved in violence in Afghanistan’s Nuristan province, calling the claims baseless.
Against this backdrop, Khalilzad said improved relations should focus on economic cooperation, development and mutual security guarantees, with neither country allowing its territory to be used against the other.
Latest News
Afghanistan central bank and ACGF sign cooperation agreement
Da Afghanistan Bank (DAB) and the Afghan Credit Guarantee Foundation (ACGF) have signed a cooperationmemorandum of understanding (MoU) aimed at strengthening the financial sector and expanding access to financial resources for small, medium and large businesses.
The agreement was signed during a ceremony at the DAB Supreme Council Hall, where DAB First Deputy Governor Sediqullah Khalid said such agreements create opportunities to provide suitable and diverse Islamic financial services to citizens and expand access to financing for small and medium-sized enterprises.
Khalid said that under the agreement, banks and financial institutions will initially receive technical and professional support. He added that five banks and one microfinance institution will receive grants worth around $1 million in the first phase to support financing for small and medium-sized businesses.
He said other banks and financial institutions that meet the required criteria would benefit from the grants and related facilities in later phases.
Khalid also said that attention would be given to facilitating the creation and financing of small businesses for Afghans returning from other countries.
Under the agreement, the two sides will cooperate on strengthening the financial sector, expanding access to financial resources for businesses, promoting Islamic financial services and building the capacity of financial institutions.
Technical and professional assistance, training programs and capacity-building opportunities will also be provided to banking and non-banking financial institutions.
Roger Thomas Piltzer, chairman of the ACGF Board of Trustees, also welcomed the agreement and stressed the importance of continuing and expanding cooperation with Da Afghanistan Bank.
The agreement aims to establish a framework for cooperation between the two sides to strengthen Afghanistan’s financial sector, expand access to Islamic financial services and provide financial resources for small and medium-sized businesses.
Latest News
Tajikistan reaffirms support for peace and stability in Afghanistan
Tajikistan has reaffirmed its support for the Afghan people, stressing that peace, stability and economic opportunities in Afghanistan are closely linked to security and sustainable development in the region.
Speaking at the 81st session of the United Nations General Assembly in New York on Saturday, Tajik Foreign Minister Sirodjiddin Muhriddin said lasting security and sustainable development in the region are closely connected to the situation in Afghanistan.
“Afghanistan needs peace, stability and economic opportunity,” Muhriddin said.
He added that Tajikistan would continue to support the Afghan people and constructive regional cooperation aimed at achieving a peaceful and stable Afghanistan.
“When Tajikistan speaks about peace, we also speak from experience,” Muhriddin said.
-
Regional5 days agoIran airlines cancel flights as US sanctions hit
-
Sport4 days agoAfghanistan open Asian Games cricket campaign with win over Japan
-
World4 days agoTrump welcomes Chinese President Xi as US-China summit gets underway
-
Latest News1 day agoAfghanistan says 28 killed, 32 captured in Nuristan operation
-
World2 days agoTrump rejects Iranian proposal to open Hormuz and end fighting
-
Sport1 day agoAfghan bodybuilder Ali Bilal finishes runner-up at Mr Olympia for third straight year
-
Latest News4 days agoKhalilzad warns Pakistan-Afghanistan tensions likely to worsen after fresh airstrikes
-
Sport3 days agoAfghanistan to face India in Asian Games cricket quarter-final
