INSUBCONTINENT EXCLUSIVE:
In their January Economic Monitor report, the World Bank noted Monday that while Afghanistan&s economic growth in 2023-24 was a positive
development, growth remained insufficient to significantly improve social indicators.&High poverty, unemployment, limited resources, and
weak purchasing power continue to leave millions vulnerable,& the report stated adding that the outlook remains fragile due to policy
uncertainty, financial isolation, and inadequate human and
physical capital.&A rapid decline in foreign aid could further weaken aggregate
demand, exacerbating economic pressures,& the World Bank stated.The World Bank report revealed that Afghanistan&s trade deficit surged by 54
percent in 2024, reaching $9 billion, which represents 45 percent of the country&s gross domestic product (GDP).The report attributes this
decline to a five percent drop in exports, totaling $1.8 billion, primarily due to a reduction in coal and textile exports.&Coal exports saw
the steepest decline, plunging 64 percent to $92 million as Pakistan shifted to its traditional suppliers,& stated the World Bank.The report
highlighted an 11.5 percent increase in Afghanistan&s revenue collection, primarily driven by non-tax revenue and taxes levied at the
country&s borders.&Revenue collection remained strong in the first ten months of FY2024-25 (March 22, 2024 & January 21, 2025), totaling AFN
190.5 billion ($2.5 billion), or 12 percent of annual GDP,& stated the report.The report also noted the country&s central bank, Da
Afghanistan Bank, suspended US dollar auctions from September 4 to December 9 last year, which contributed to the depreciation of the
The auctions resumed in January 2025, with the bank injecting more than $100 million.The World Bank noted that fragile trade relations with
Pakistan pushed Afghanistan to diversify its export markets, with Iran, Kazakhstan, and Uzbekistan each contributing around three percent of
total exports.However, Pakistan remains the largest export destination, accounting for 45 percent, followed by India at 34
percent.&Afghanistan&s export base remains heavily dependent on food and coal, which made up 60 percent of total exports in 2024, down from
80 percent in 2023,& the report read adding that &this
highlights the urgent need for Afghanistan to expand its export portfolio and reduce
reliance on a few commodities and markets&.The World Bank stated that domestic tax revenue meanwhile grew 11 percent to AFN 72.1 billion,
contributing 2.8 percentage points to overall revenue growth.Non-tax revenue increased by 22 percent to AFN 66 billion
This growth was driven by higher income from mining, tolls, vehicle registrations, passport issuance, transport services, railways, and
telecommunications, the report read.&Ministries responsible for non-tax revenue exceeded targets by eight percent, contributing 45 percent
to inland revenue collection,& the World Bank stated.Customs duties and fees grew 20 percent year-on-year to AFN 51.5 billion, contributing
4.5 percentage points to total revenue growth
This increase was fueled by higher imports, stronger trade ties with Iran and Central Asia, improved border management, and recent tariff
adjustments.The post World Bank reports Afghanistan&s economic recovery remains ‘fragile& first appeared on Ariana News.
