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.”

An Il-76 plane from the Russian emergencies ministry delivered another batch of humanitarian aid for the people of Afghanistan this week, the ministry’s press service told TASS.

"The ministry’s special flight delivered the fifth batch of humanitarian aid for the population of the Islamic Republic of Afghanistan. Russian rescuers handed over a total of 28 metric tons of humanitarian cargo, namely food," the ministry said.

The humanitarian delivery was carried out in accordance with Russian President Vladimir Putin’s decree and instructions issued by Emergency Situations Minister Alexander Kurenkov.

Russia has sent 1,200 tons of humanitarian aid to Afghanistan in the past 12 months.

Afghanistan’s former president Hamid Karzai on Wednesday called on the Islamic Emirate to immediately overturn a reported ban on girls getting a medical education.

According to a statement issued by Karzai, “Afghanistan will be saved from needing outsiders and overcome internal problems when it has specialized and trained human resources, and this is possible if the field of education and learning of sciences is available for all young people, both boys and girls.”

“Hearing the news that the doors of medical science institutions are closed to girls, at a time when women and mothers in all parts of the country are facing many health problems, is a cause of great regret,” Karzai stated.

His statement comes amid reports that emerged Tuesday night and Wednesday of the issuing of a decree by the IEA’s Supreme Leader Hibatullah Akhundzada reportedly ordering the closure of medical education institutions for girls.

According to Human Rights Watch, the issuing of the decree was announced at a meeting at the Ministry of Public Health on Monday.

However, the Islamic Emirate has not confirmed this move to the media.

Despite the absence of confirmation by the IEA on the reports, media outlets around the world published stories on Wednesday.

Even the European Union issued a statement expressing its “strong concerns” over the ban.

Afghanistan’s cricket star Rashid Khan also commented on the reports. He however pointed out that education holds a central place in the teachings of Islam.

He said in a statement: “The [Holy] Quran highlights the importance of learning and acknowledges the equal spiritual worth of both genders.”

Rashid said it was “with deep sadness and disappointment that I reflect on the recent closures of educational and medical institutions for the sisters and mothers of Afghanistan.

“This decision has profoundly affected not only their future but also the broader fabric of our society,” he said.

Rashid was one of many who also pointed out that such a decision would directly “impact the healthcare and dignity of women”.

“It is essential for our sisters and mothers to have access to care provided by medical professionals who truly understand their needs,” he said.

In conclusion he stated: “I sincerely appeal for the reconsideration of this decision so that Afghan girls may reclaim their right to education and contribute to the nation's development. Providing education to all is not just a societal responsibility but a moral obligation deeply rooted in our faith and values.”