Pakistan<\/a>, boosting activity in services, industry, mining, and construction. The agriculture sector has shown relative stability despite severe droughts, contributing significantly through a record harvest of irrigated wheat.<\/p>\nHowever, this economic growth has not translated into improved livelihoods for the population. Rapid population growth, estimated at 8.6% in 2025, is expected to cause a roughly 4% decline in per capita income. Inflation hovers around 2%\u2014one of the lowest in the region\u2014linked to stable food prices and a relatively strong national currency.<\/p>\n
Yet this also highlights the economy’s heavy reliance on imports and vulnerability to external shocks.In public finance, domestic revenues have improved, with internal tax revenues projected to reach 17.1% of GDP in 2025. Declining foreign aid, however, has constrained the government’s fiscal space, increasing dependence on trade-related taxes and international support.<\/p>\n
The banking system remains fragile, facing regulatory uncertainties, rising non-performing loans, weak credit growth, liquidity shortages, and the ongoing transition to Islamic banking. Cash circulation outside the formal system has further limited access to financial services.<\/p>\n
The labor market is under intense pressure. Nearly one in four young people is unemployed, and restrictions on women’s education and economic participation have weakened human capital and long-term growth prospects.<\/p>\n
The massive return of migrants\u2014estimated at 4 to 4.7 million from late 2023 to mid-2025\u2014has exacerbated strains on job opportunities and public services, particularly in urban and border areas.<\/p>\n
The World Bank stresses that sustaining this growth requires fundamental reforms: attracting private investment, strengthening the financial system, diversifying exports, converting returnee-driven demand into sustainable employment, improving governance, creating a better business environment, and enhancing engagement with the international community.<\/p>\n
Without these steps, Afghanistan’s reliance on humanitarian aid will persist, and prospects for inclusive, long-term growth will remain limited.<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
According to the latest World Bank Afghanistan Development Update (December 2025), Afghanistan’s economy is on a growth path for the second year in a row. Kabul 24: Gross Domestic Product (GDP) grew by approximately 2.5% in 2024, with projections reaching 4.3% in 2025. This expansion occurs amid relatively controlled inflation and improved domestic revenues, but […]<\/p>\n","protected":false},"author":3,"featured_media":23610,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[43,37],"tags":[],"class_list":["post-23609","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-world"],"yoast_head":"\n
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