World Bank: Afghanistan Economy Shows Modest Recovery, but Per Capita Income Drops 5.6%

DID Press: World Bank has reported that Afghanistan’s economy continues to show a modest recovery; however, rising population pressures and returning migrants have offset gains, resulting in a decline in living standards.

In its latest “Afghanistan Economic Monitoring” report, the World Bank stated that gradual economic growth has been supported by increased domestic demand, relative price stability, and improved revenue collection by authorities. However, it noted that these gains have been outweighed by rapid population growth, leading to a 5.6% decline in per capita income.

The report added that inflation has eased and the Afghan currency has strengthened against the US dollar. Annual inflation stands at 8%, while consumer prices fell by 1.2% in May, driven mainly by lower prices of vegetables, oil, and meat. At the same time, housing and healthcare costs have increased.

On trade, exports dropped to $79.2 million, while imports reached approximately $970 million. The World Bank attributed the decline to border closures with Pakistan and broader regional instability. Afghanistan’s exports remain concentrated in a limited range of goods, mainly food products.

The report also noted that Iran has become Afghanistan’s largest transit route and import source, accounting for more than 56% of imports, increasing the country’s dependency on a single corridor.

In public finance, domestic revenue reached 22 billion Afghanis in May, showing an increase compared to the previous month. However, customs revenues declined due to reduced foreign trade, while non-tax revenues—such as income from passports, telecommunications, and transit fees—increased.

The World Bank warned that despite relative fiscal stability, Afghanistan’s economy remains highly vulnerable, with heavy reliance on trade-related income making it susceptible to border closures and regional tensions.