Navigating the Economic Storm: Afghanistan’s Path to Resilience and Sustainability

Afghanistan’s economic future remains uncertain, with a 26 percent contraction in real GDP growth and decreasing international support for essential services. According to the World Bank’s latest Afghanistan Development Update, titled Navigating Challenges: Confronting Economic Recession and Deflation. The report highlights the importance of transitioning from consumption-driven growth and international aid reliance to a more resilient, private sector-led economy.

Structural deficiencies in the private sector, combined with decreasing international support for essential services, are expected to hinder any significant economic progress. This economic standstill is likely to worsen poverty and unemployment, with half of the population already living in poverty and 15 million people facing food insecurity. However, agriculture has the potential to drive growth, reduce poverty, create jobs, and improve income distribution. To unlock this potential, strategic investments are required in irrigation infrastructure, land tenure security, and market access to enhance agricultural productivity and resilience.

The Afghanistan Development Update is part of the World Bank’s Afghanistan Futures program, which produces research, monitoring, and analytical reports on the country’s economy and society. Through this program, the World Bank aims to support evidence-based policymaking and provide insights to the international community on economic developments in Afghanistan. For more information about the program or how you can contact Diana Chung at dchung1@worldbank.org in Washington.