Afghanistan’s Economic Uncertainty and the Need for Strategic Investments to Foster Growth and Reduce Poverty

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 report. The 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.

Structural deficiencies in the private sector and gender policies are expected to hinder any significant economic progress. To unlock the potential of agriculture, strategic investments are required in irrigation infrastructure, land tenure security, and market access to enhance agricultural productivity and resilience. Agriculture has the potential to drive growth, reduce poverty, create jobs, and improve income distribution.

The World Bank Country Director for Afghanistan emphasizes the importance of transitioning from consumption-driven growth and international aid reliance to a more resilient, private sector-led economy. This shift should focus on investing in health and education and capitalizing on Afghanistan’s strengths in agriculture and extractive sectors.

The Afghanistan Development Update is part of the World Bank’s Afghanistan Futures program, which aims to support evidence-based policymaking and provide insights to the international community on economic developments in Afghanistan. For more information, please contact Diana Chung at dchung1@worldbank.org in Washington.