In its latest report released on Wednesday, the World Bank stated that Afghanistan’s economy is projected to grow by 2.5 percent in the fiscal year 2024–2025, slower than the country’s population growth rate.
The Bank further forecasts that economic growth will average just 2.2 percent in the fiscal year 2025–2026.
The report also notes a weakening growth outlook for South Asia amid rising global economic uncertainty. It highlights that enhancing domestic revenue collection could improve resilience across the region and help mitigate the impact of future economic shocks.
Regional economic growth is projected to slow to 5.8 percent in 2025.
Martin Raiser, World Bank Vice President for South Asia, emphasised the need for structural reforms across the region to strengthen economic resilience and foster job creation and sustainable growth.
The World Bank’s previous report, published in February, described Afghanistan’s economy as fragile due to ongoing financial isolation, political instability, and a shortage of skilled human resources. It warned that further reductions in foreign aid could suppress aggregate demand and exacerbate economic challenges.
This warning coincides with the United States' suspension of humanitarian aid to Afghanistan. Observers caution that continued aid suspensions or a complete halt in aid could push the country towards a humanitarian crisis.
According to the United Nations, over half of Afghanistan’s population is in need of humanitarian assistance.
