Business
Afghanistan’s growth prospects remain uncertain amid global uncertainty: World Bank report
According to the report, in Afghanistan, despite aid cuts, the economy is estimated to have grown by 2.5 percent in FY24-25, which was slower than the pace of population growth.
Amid increasing uncertainty in the global economy, South Asia’s growth prospects have weakened, with projections downgraded in most countries in the region, including Afghanistan.
Stepping up domestic revenue mobilization could help the region strengthen fragile fiscal positions and increase resilience against future shocks, said the World Bank in its twice-yearly regional outlook – the South Asia Development Update – which was released on Wednesday.
According to the report, in Afghanistan, despite aid cuts, the economy is estimated to have grown by 2.5 percent in FY24-25, which was slower than the pace of population growth.
Growth is forecast to increase only moderately to 2.2 percent in 2025/26, the World Bank report stated.
Coinciding with the release of the South Asia report was the World Bank’s Afghanistan Development Update report which explained the situation in more detail.
Stating that while the country’s economy is gradually recovering, the outlook remains uncertain due to growing fiscal pressures, a widening trade deficit and persistent poverty and food insecurity.
The report stated that these factors continue to strain households and hinder inclusive growth.
However, Afghanistan recorded its second consecutive year of growth in 2024, the World Bank stated, adding that the recovery was largely driven by the agriculture sector.
Manufacturing and services remained subdued due to an unfavorable business environment, persistent export barriers and declining foreign aid.
Modest gains in private consumption and real estate investment contributed to growth, the report stated, adding that rising imports widened the trade deficit, increasing external vulnerabilities.
At the same time, rapid population growth and the return of refugees continue to strain job creation and public service delivery, further deepening the fragility of the economy.
Deflation meanwhile persisted in 2024, with food prices having declined sharply. Non-food inflation remained stable. Persistent deflation continued in 2024,
Poverty, food insecurity, and malnutrition however remained pressing challenges and despite modest wage growth, high unemployment and restrictions on women continue to strain livelihoods, the report stated.
Early this year, 14.8 million people faced food shortages, while acute malnutrition – now affecting 4.7 million women and children – is worsening. The World Bank warned that without urgent action, human capital development will be further undermined.
Fiscal pressures meanwhile remained high as domestic revenue mobilization, though relatively strong, is insufficient to offset the sharp decline in aid.
The report also stated that exports declined in 2024, while imports surged – widening the trade deficit.
The increase in imports however was driven by rising industrial demand and substitution of domestic consumer goods.
The afghani (AFN) currency, which had appreciated significantly in 2023 due to strong foreign inflows stabilized with slight depreciation in 2024 but the banking sector remained fragile.
The World Bank reported that economic growth is expected to slow to 2.2 percent in 2025 amid aid disruptions, before gradually recovering to 2.5 percent in 2026–27.
The organization however warned that while Afghanistan’s youth remain a vital source of resilience and untapped potential, urgent action to expand job opportunities for them is needed.
Business
Afghanistan eyes direct Basmati rice imports from India amid tensions with Pakistan
Afghanistan is exploring direct imports of Basmati rice from India as it seeks to diversify its supply sources amid ongoing tensions with Pakistan, according to a report by The Hindu.
The report said Indian exporters and Afghan importers are expected to meet next month to discuss expanding direct trade in Basmati rice, following preliminary talks between officials from both countries held last week with the facilitation of the PHD Chamber of Commerce and Industry.
Afghanistan consumes nearly 500,000 tonnes of Basmati rice annually and has traditionally relied on imports from neighboring Pakistan. However, industry sources told The Hindu that recent strains in Afghanistan-Pakistan relations have encouraged Kabul to seek alternative suppliers, including India.
Representatives of Afghanistan’s diplomatic mission in New Delhi reportedly took part in the discussions and expressed interest in increasing purchases of Indian Basmati rice. At present, some Indian rice reaches Afghanistan indirectly through traders in Iran and Dubai, a route that adds to transportation and transaction costs.
One proposal under consideration is to transport rice through Iran’s Bandar Abbas Port, subject to agreements between the two governments. The discussions are also expected to cover logistics, payment mechanisms, and the possibility of barter trade, with Afghanistan’s dried fruit exports to India seen as a potential component of future trade arrangements.
According to The Hindu, a direct trade arrangement could help India expand its share of Afghanistan’s Basmati market, which has historically been dominated by Pakistani suppliers.
Business
Afghanistan, Kyrgyzstan establish trade council to boost economic cooperation
The two sides signed a memorandum of understanding to establish the Afghanistan-Kyrgyzstan Trade Council.
The Embassy of the Islamic Emirate of Afghanistan in Kyrgyzstan says the Afghanistan-Kyrgyzstan Business Forum has been held with the participation of officials from both countries.
According to a statement issued by the embassy, Acting Ambassador Abdul Shakoor Haqqani said Afghanistan supports strengthening bilateral trade relations and promoting joint economic initiatives between the two countries.
The statement added that the two sides signed a memorandum of understanding to establish the Afghanistan-Kyrgyzstan Trade Council. The council aims to strengthen ties between business communities, coordinate joint initiatives, and expand and support economic projects.
Meanwhile, Sayed Karim Hashemi, Chairman of the Afghanistan Chamber of Commerce and Investment, arrived in Kyrgyzstan on Saturday at the head of a trade delegation to participate in the forum.
Business
Afghanistan invites Turkish investors to expand joint investments
Participants stressed the importance of increasing private sector cooperation and creating new opportunities to boost trade and investment between Afghanistan and Türkiye.
A high-level Afghan business delegation, led by the Chairman of the Balkh Chamber of Commerce and Investment, Mohammad Ibrahim Ghazanfar, participated in the Afghanistan–Türkiye Joint Business Council meeting in Istanbul, calling for expanded joint investment and stronger economic cooperation between the two countries.
According to a statement from the Balkh Chamber of Commerce and Investment, Ghazanfar invited Turkish investors and industrialists to explore investment opportunities across various sectors in Afghanistan, emphasizing the country’s potential for mutually beneficial partnerships.
The meeting brought together business leaders, investors, and private sector representatives from both Afghanistan and Türkiye to discuss ways to strengthen bilateral trade and economic ties.
During the event, several cooperation agreements were signed between Afghan and Turkish economic institutions. The agreements are aimed at expanding commercial relations, promoting joint investment projects, and enhancing economic cooperation between the two countries.
The meeting was chaired by Süleyman Güllü, Chairman of the Türkiye–Afghanistan Joint Business Council, and was attended by Mohammad Akbar Azimi, the Islamic Emirate of Afghanistan’s Consul General in Istanbul, along with a number of businessmen and investors from both countries.
Participants stressed the importance of increasing private sector cooperation and creating new opportunities to boost trade and investment between Afghanistan and Türkiye.
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