In its latest monthly report published on Tuesday, the World Bank said Afghanistan’s economy continues to grow modestly despite regional tensions and border closures, with real GDP estimated at around 4.8 percent.
According to the report, the growth has largely been driven by rising domestic demand and the return of millions of Afghan migrants, factors that have increased household consumption and market activity.
However, the World Bank warned that the return of around 3.7 million Afghans has outpaced economic growth, leading to a 5.6 percent decline in per capita GDP.
The institution said population growth and rising prices have placed additional pressure on household livelihoods.
The report noted that inflation averaged 3.6 percent during the 2025 fiscal year and rose to 7.6 percent in March 2026.
The World Bank attributed the increase to lower agricultural production, higher demand and trade disruptions.
It said that although exchange rate stability and lower global prices helped partly contain inflation, rising costs have reduced household purchasing power, especially among poorer communities.
The World Bank said the situation has worsened poverty and food insecurity.
Estimates suggest that by late 2025 around 14 million people were facing acute food insecurity, a figure that could rise to 17.4 million, nearly 40 percent of Afghanistan’s population, during the coming winter.
In another section of the report, the World Bank said Taliban domestic revenues rose to 19.8 percent of GDP in 2025, mainly because of improved tax collection.
However, declining foreign aid has reduced the authorities’ ability to invest in infrastructure and respond to economic crises.
The World Bank also described Afghanistan’s external economy as fragile, saying higher imports and weak exports have widened the trade deficit.
It estimated that the current account deficit reached 36.1 percent of GDP in 2025, reflecting Afghanistan’s heavy dependence on imports.
The institution added that the private sector has shown signs of improvement in sales, employment and investment since 2022, but persistent problems such as electricity shortages, limited access to finance and the large informal economy continue to obstruct sustainable growth and job creation.
Faris Hadad-Zervos, World Bank country director for Afghanistan, said Afghanistan’s economy had shown some resilience in the face of major challenges but stressed that economic growth alone is not enough.
He said rapid population growth has outpaced economic gains, leading to falling incomes and worsening poverty.
The World Bank predicts Afghanistan’s economic growth will slow to around 4 percent in 2026 and warned that ongoing regional instability, declining foreign assistance and demographic pressures will further weaken the country’s economic outlook.