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World Bank reports Afghanistan’s economic recovery remains ‘fragile’
The World Bank report revealed that Afghanistan’s trade deficit surged by 54 percent in 2024, reaching $9 billion, which represents 45 percent of the country’s gross domestic product (GDP).
In their January Economic Monitor report, the World Bank noted Monday that while Afghanistan’s economic growth in 2023-24 was a positive development, growth remained insufficient to significantly improve social indicators.
“High poverty, unemployment, limited resources, and weak purchasing power continue to leave millions vulnerable,” the report stated adding that the outlook remains fragile due to policy uncertainty, financial isolation, and inadequate human and
physical capital.
“A rapid decline in foreign aid could further weaken aggregate demand, exacerbating economic pressures,” the World Bank stated.
The World Bank report revealed that Afghanistan’s trade deficit surged by 54 percent in 2024, reaching $9 billion, which represents 45 percent of the country’s gross domestic product (GDP).
The report attributes this decline to a five percent drop in exports, totaling $1.8 billion, primarily due to a reduction in coal and textile exports.
“Coal exports saw the steepest decline, plunging 64 percent to $92 million as Pakistan shifted to its traditional suppliers,” stated the World Bank.
The report highlighted an 11.5 percent increase in Afghanistan’s revenue collection, primarily driven by non-tax revenue and taxes levied at the country’s borders.
“Revenue collection remained strong in the first ten months of FY2024-25 (March 22, 2024 – January 21, 2025), totaling AFN 190.5 billion ($2.5 billion), or 12 percent of annual GDP,” stated the report.
The report also noted the country’s central bank, Da Afghanistan Bank, suspended US dollar auctions from September 4 to December 9 last year, which contributed to the depreciation of the afghani (AFN). The auctions resumed in January 2025, with the bank injecting more than $100 million.
The World Bank noted that fragile trade relations with Pakistan pushed Afghanistan to diversify its export markets, with Iran, Kazakhstan, and Uzbekistan each contributing around three percent of total exports.
However, Pakistan remains the largest export destination, accounting for 45 percent, followed by India at 34 percent.
“Afghanistan’s export base remains heavily dependent on food and coal, which made up 60 percent of total exports in 2024, down from 80 percent in 2023,” the report read adding that “this
highlights the urgent need for Afghanistan to expand its export portfolio and reduce reliance on a few commodities and markets”.
The World Bank stated that domestic tax revenue meanwhile grew 11 percent to AFN 72.1 billion, contributing 2.8 percentage points to overall revenue growth.
Non-tax revenue increased by 22 percent to AFN 66 billion. This growth was driven by higher income from mining, tolls, vehicle registrations, passport issuance, transport services, railways, and telecommunications, the report read.
“Ministries responsible for non-tax revenue exceeded targets by eight percent, contributing 45 percent to inland revenue collection,” the World Bank stated.
Customs duties and fees grew 20 percent year-on-year to AFN 51.5 billion, contributing 4.5 percentage points to total revenue growth. This increase was fueled by higher imports, stronger trade ties with Iran and Central Asia, improved border management, and recent tariff adjustments.
Nooruddin Azizi, Minister of Industry and Commerce of the Islamic Emirate of Afghanistan, met on Thursday with Sadin Ayyıldız, Chargé d’Affaires of the Turkish Embassy in Kabul. During the meeting, Ayyıldız invited the Minister of Industry and Commerce to participate in Turkey’s Antalya Diplomacy Forum.
According to a statement from the Ministry of Industry, the meeting also emphasized the economic, trade, and historical relations between Kabul and Ankara, as well as the export of Afghan goods to Turkey.
The two sides discussed increasing trade volume between the two countries, strengthening economic relations, facilitating and enhancing commercial activities, cooperation in road transport along various routes, activating the Lapis Lazuli Corridor, and regional cooperation.
Azizi, while thanking Turkey for inviting the Islamic Emirate to the Antalya Diplomacy Forum, introduced the Ministry’s technical team to ensure better coordination and planning.
The Antalya Diplomacy Forum is an international conference held annually in Turkey, aimed at examining global challenges and finding joint solutions through dialogue and diplomacy. It hosts representatives from more than 100 countries, including presidents, leaders, high-ranking officials, international organizations, analysts, and media from various countries.
Mullah Mohammad Hassan Akhund, Prime Minister of the Islamic Emirate, in a telephone conversation initiated by Mohammad Anwar Ibrahim, Prime Minister of Malaysia, discussed regional developments, particularly the recent situation between Pakistan and Afghanistan.
Zabihullah Mujahid, spokesperson for the Islamic Emirate, said in a statement that Hassan Akhund stated during the call that the Islamic Emirate of Afghanistan’s principled position is clear and that it believes in resolving issues through mutual understanding and cooperation.
Hassan Akhund added that during Eid al-Fitr, at the request of Saudi Arabia, Turkey, and Qatar, the Islamic Emirate demonstrated its goodwill by respecting a pause in defensive operations.
He stated that violence benefits no party and that actions that increase tensions should be avoided, emphasizing that wisdom and rationality must guide efforts to resolve problems.
He also expressed concern over rising regional tensions following the US and Israeli attacks on Iran.
The Malaysian Prime Minister also expressed concern about the regional situation and hoped that the temporary halt in hostilities between Afghanistan and Pakistan would continue, and that existing problems could be resolved through sincere negotiations and understanding.
He added that Malaysia aims to play a positive role in facilitating understanding between both parties.
Israel’s defence minister says that an Israeli air strike has killed Alireza Tangsiri, commander of the Iranian Revolutionary Guards’ navy.
The killing was carried out “last night, in a precise and lethal operation” and targeted other “senior officers of the naval command”, said Israel Katz, in a video statement.
“The man who was directly responsible for the terrorist operation of mining and blocking the Strait of Hormuz to shipping was blown up and eliminated,” he claimed.
Since the start of the joint US-Israeli war on Iran on February 28, Israel has announced the assassination of several top Iranian officials, including Supreme Leader Ali Khamenei and the Islamic Republic ‘s powerful security chief, Ali Larijani.
Al Jazeera’s Tohid Asadi, reporting from Tehran, said there was no official Iranian confirmation yet of Tangsiri’s killing.
“But if it’s true it’s going to be another major blow for a country that has already experienced a lot of military commanders being killed” since the war began, he said.
The head of the Basij paramilitary forces, Brigadier General Gholamreza Soleimani, and Intelligence Minister Esmail Khatib were also assassinated in Israeli attacks.
Moreover, in recent days, Israeli forces have carried out several strikes targeting the naval assets of Iran.
Last week, Israeli airstrikes hit several Iranian naval ships in the Caspian Sea, including ones equipped with missile systems, support vessels, and patrol craft.
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