Contrary to the Taliban’s claims of economic growth, Afghanistan’s economic situation continues to be reported as fragile and critical by reputable international economic organizations. In the most recent instance, the World Bank has stated in a report that Afghanistan’s economy is facing serious challenges such as financial restrictions, trade imbalances, and limited capacity for public investment. The Bank added that although Afghanistan’s economy experienced a 2.7 percent GDP growth, this growth does not seem sustainable or secure. The World Bank emphasized that poverty remains widespread, with vulnerable groups, including women, children, and internally displaced people, bearing the brunt of the economic difficulties.
Meanwhile, the Pakistan Afghanistan Joint Chamber of Commerce & Industry (PAJCCI) announced that trade exchanges between the two countries have decreased from 2.5 billion dollars to 700 million dollars. This organization has blamed Islamabad for the decline in trade with Afghanistan. These concerns are raised as winter approaches and families increasingly worry about the lack of sufficient provisions for essential food supplies and heating during the coming cold season.
The World Bank has stated in its latest report that Afghanistan’s economy is facing serious and fragile challenges, including financial restrictions, trade imbalances, and limited public investment capacity. The report mentions that the average GDP growth is 2.7 percent but is unsustainable. Additionally, the report stresses that Afghanistan’s economic recovery prospects still need to be clarified.
The World Bank report reads: “The economic recovery of Afghanistan remains uncertain. The average GDP growth of 2.7 percent, driven by private consumption, has only compensated for about 10 percent of past economic losses and reflects the slow and fragile nature of this recovery.”
The World Bank emphasized that a GDP growth of over 2 percent has not substantially addressed deeper structural issues and significant vulnerabilities within Afghanistan’s economy. According to the Bank, activating women’s participation in the economy, strengthening domestic resource mobilization, stabilizing prices, and addressing critical human capital shortages, particularly in education and healthcare for women, are essential for long-term improvement and reducing vulnerability to future shocks.
Faris Hadad-Zervos, the World Bank’s country director for Afghanistan, stated that Afghanistan’s long-term growth prospects depend on harnessing the substantial potential of the domestic private sector and improving the overall business climate. He added that the key to this is increasing investment, improving access to financial resources for small businesses, and supporting educated and skilled women entrepreneurs. He stressed that without these measures, Afghanistan faces the risk of prolonged stagnation with limited prospects for sustainable development.
The World Bank report further stated that poverty remains widespread, and vulnerable groups, including women, children, and displaced populations, continue to carry the heaviest burden of economic hardships due to the absence of social support mechanisms. The report clarified that the trade deficit, exacerbated by Afghanistan’s reliance on imports of essential goods like fuel, food, and machinery, has worsened and could pose a serious threat to the country’s economic stability.
Previously, the World Bank had reported that Afghanistan’s economy in 2023-2024, after two years of severe contraction, faces major issues such as weak human capital, high unemployment, widespread poverty, and food insecurity, which could inflict long-term damage on both the country’s economy and social structure.
On the other hand, the Pakistan Afghanistan Joint Chamber of Commerce & Industry (PAJCCI) has announced that trade between the two countries has dropped from 2.5 billion dollars to 700 million dollars. The organization has blamed Islamabad for the reduction in trade exchanges with Afghanistan.
The Pakistani newspaper Dawn, citing the deputy of this chamber, reported that the issuance of temporary documents and the requirement for bank guarantees equal to the value of goods has played a key role in reducing trade exchanges. According to Ziaul Haq Serhadi, the deputy of the Pakistan Afghanistan Joint Chamber of Commerce & Industry (PAJCCI), adding 14 items to the negative list, imposing a 10 percent tariff on Afghan transit goods, and halting more than 300 commercial containers belonging to Afghan traders at the Karachi port, have led to a reduction in trade relations between the two countries.
Dawn also quoted the deputy of this chamber as stating that Islamabad’s policies have caused a significant portion of Afghanistan’s trade to shift from the Karachi port to the Chabahar port in Iran, resulting in the loss of thousands of jobs in Pakistan’s customs.
Reports about widespread poverty, a fragile economy, and an uncertain economic outlook in Afghanistan come as people have faced a severe economic crisis, increasing poverty, and persistent unemployment over the past three years. The majority of citizens who have been unemployed during this period are deeply concerned about the approaching winter. Some of them state that due to the cold weather, people are using anything as fuel, which results in severe air pollution and the spread of various diseases.
Many citizens of the country report having been unemployed throughout the year and, with the arrival of winter, are extremely worried about having no money to buy food or fuel to heat their homes. They note that the rising prices of basic materials and fuel during the winter, ongoing city-wide power outages, and worsening air pollution in cities have exacerbated their concerns.
Currently, residents of Kabul, Herat, Kunduz, and Fayzabad, the capital of Badakhshan province, are expressing grave concerns about persistent power outages. Among them, some residents of Kabul say that although the winter season has not fully started, air pollution has already increased significantly. According to them, this situation will lead to the spread of various diseases in the city.
Fawzia, a resident of Kabul, told the Hasht-e Subh Daily: “People use anything as fuel. They burn plastic and other smoky materials, which worsens the air pollution. Also, the central heating systems and the lack of proper coal filtration systems have caused the air to become more polluted even before winter has fully begun.”
Mohammad Ajan, a resident of the Pul-e-Alchin area in Kunduz City, told the Hasht-e Subh Daily that he buys old iron and other tools and sells them at a low price. He adds that he earns between 100 and 200 Afghanis daily and uses this to support the living expenses of his 11 children. Mohammad Ajan states that he has six sons and five daughters and has never bought them new clothes, living in difficult conditions.
Yar Mohammad, another citizen, told the Hasht-e Subh Daily that he works only for 60 Afghanis a day, which he spends on dry bread. He says: “I am the breadwinner for 10 people, including my six daughters. We have no wood, no fuel, and no electricity; the power comes one day and is off for two days. I collect plastic and boil tea with it, eating it with dry bread. Maybe once or twice a week, we cook something in a pot. No organizations help us, and our local representatives do not help either. If we make noise, they throw us out of the street.”
Mohammad Reza, a resident of the Hyderabad area in Ghazni City, sells second-hand clothes in a corner of the city. He complains about the lack of markets and the reduced purchasing power of the people compared to previous years. Reza says: “Every summer, I sell homemade ice cream by bike, and in winter, I sell second-hand clothes, but this year, the markets are very quiet. There are many sellers, but few buyers, and there is no benefit.”
This resident of Ghazni adds that he is the breadwinner for a family of six and has not yet been able to prepare his winter fuel supplies. He adds: “So far, we have not received any wood. This year, another problem has emerged—wood is not available in the market. They say the Taliban has banned it. Wood sellers who have stock from last year are selling one seer of wood for 200 Afghanis, which is very expensive.”
On the other hand, citizens living in more remote and hard-to-reach areas are worried about closed roads, the lack of communication networks, and the absence of medicine, female doctors, and active health centers. They say that if humanitarian organizations do not address their winter problems, they do not expect the Taliban to solve their issues. These people accuse the Taliban of being disorganized, interfering in humanitarian aid efforts, and distributing aid in favor of themselves and their affiliates.
These concerns come at a time when, in the latest instance, the World Food Programme (WFP) has stated that 14.8 million people in Afghanistan will need urgent assistance in the coming winter. The organization reports that it only has sufficient funding to assist 6 million people for the upcoming winter. WFP has warned that millions in Afghanistan will face severe hardships.
You can read the Persian version of this daily report here:
فقر گسترده و اقتصاد شکننده؛ بیکاری و عدم تعادل تجاری افغانستان را تهدید میکند | روزنامه ۸صبح
