The International Monetary Fund and the World Bank have raised concerns about Afghanistan’s economic outlook, highlighting present vulnerabilities despite modest growth.
KABUL POST - IMF said its Executive Board held an informal session to review Afghanistan’s economy, the meeting formed part of its regular monitoring process for countries where Article IV consultations (routine economic assessments) had been delayed. IMF staff provided the Board with the latest available data, noting that such briefings typically occur when formal reviews are overdue by more than 18 months.
Separately, the World Bank reported that Afghanistan’s economy grew by 4.8% in the current fiscal year but the growth has not unfolded into improved living standards. Rapid population growth (estimated at around 11%) has led to a decline of roughly 5.6% in per capita income, deepening the gap between economic growth and everyday realities.
The report points out multiple factors weighing on the country including declining foreign aid, border disruptions, natural disasters and the large-scale return of migrants. While returning migrants have boosted short-term demand, they have also stressed jobs, housing and public services.
Growth has been driven mainly by non-agricultural sectors and private consumption but rising inflation and higher trade and transport costs have eroded purchasing power. The World Bank also noted the absence of a clear economic management strategy which has slowed recovery efforts.
Looking ahead, Afghanistan’s economy is projected to grow by around 4% next year, supported by domestic demand and investment. However, both institutions warn that regional instability and trade disruptions could pose significant risks, stressing that sustainable recovery will depend on improved stability, functioning trade routes and the effective integration of returnees into the workforce.