Tuesday, July 23, 2024

Afghanistan faces bleak economic prospects: World Bank

Immigration News

Fidel Rahmati
Fidel Rahmatihttps://www.khaama.com
Fidai Rahmati is the editor and content writer for Khaama Press. You may follow him at Twitter @FidelRahmati

The World Bank paints a bleak economic picture of Afghanistan due to the absence of GDP growth and decreasing external financing avenues for off-budget expenditures.

Afghanistan experienced a severe economic downturn, with a 20.7 percent contraction in GDP in 2021, followed by a further 6.2 percent contraction in 2022, according to a World Bank report.

Despite some resilience in rural areas from the agricultural and subsistence economy, the country faced challenges such as higher prices, reduced demand, lower employment, and disruptions to services, affecting the entire nation.

The proportion of households unable to afford basic food needs doubled from 16 percent to 36 percent during this period, indicating a worsening economic situation, as reported by the World Bank.

Concerns about the policies of the Taliban administration particularly restrictions on women and girls, prompted the international community, including the World Bank, to adjust its approach to supporting Afghanistan.

Initially, support focused on humanitarian aid, transitioning later to off-budget assistance for basic service delivery and livelihoods, in response to the changing situation in Afghanistan.

Despite efforts by the Taliban to increase domestic revenues, overall economic activity remained depressed, unemployment remained high, and the banking sector faced challenges due to constraints on international transfers and concerns about liquidity.

The World Bank warns that Afghanistan’s economic outlook remains uncertain, with the threat of stagnation looming until at least 2025, which could exacerbate poverty and unemployment while increasing food insecurity.

To achieve sustainable development, Afghanistan must leverage its comparative advantages, particularly in agriculture and extractive sectors, according to the World Bank. Agriculture, in particular, holds potential for job creation and poverty reduction.

Looking ahead, Afghanistan needs strategic planning and investment in key sectors to stimulate economic growth, create employment opportunities, and improve livelihoods, as outlined by the World Bank.

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