WORLD BANK REPORTS MODEST ECONOMIC GROWTH IN AFGHANISTAN AMID CHALLENGES

Thu 05 December 2024:

Afghanistan’s economy is showing modest signs of growth after two years of severe contraction, the World Bank has said.

In its latest development update issued late on Wednesday, the financial institution said modest GDP growth of 2.7 percent was driven by private consumption.

The partial recovery, coupled with falling food prices, helped to gradually improve household welfare.

Before the Taliban returned to power in August 2021, Afghanistan’s economy relied heavily on foreign aid.

Their takeover three years ago sent the economy into a tailspin, as billions in international funds were frozen, and tens of thousands of highly skilled Afghans fled the country and took their money with them.

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‘Limited prospects’

Afghan’s exports remained stable in 2023-24 but imports surged, creating a widening trade deficit, according to the World Bank.

This deficit, exacerbated by dependence on imports for essential goods like fuel, food and machinery, could pose a risk to the country’s economic stability.

Faris Hadad-Zervos, the World Bank’s country director for Afghanistan, said long-term growth prospects required 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,” said Hadad-Zervos.

“Without this, the country risks prolonged stagnation with limited prospects for sustainable development.”

SOURCE: TRTWORLD AND AGENCIES

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