Kabul (Special Report) — Despite trade restrictions, rising unemployment and widespread poverty, Afghanistan’s economy is showing unexpected signs of acceleration. According to the World Bank, the Afghan economy has expanded for the second consecutive year, driven mainly by low inflation and gradually rising incomes.
In its latest Afghanistan Development Update, the World Bank projects Afghanistan’s gross domestic product (GDP) to grow by 4.3 percent in 2025, compared with 2.5 percent in 2024. The report notes that despite limited resources and international constraints, partial recovery in economic activity is becoming evident.
The bank cautioned, however, that Afghanistan continues to face major challenges, including rapid population growth, a widening trade deficit and persistent poverty. While key indicators point to short-term improvement, the report stressed that long-term and sustainable growth will require structural reforms.
Drawing regional comparisons, the World Bank recalled that its Pakistan Development Update released in October highlighted economic pressures caused by floods. Pakistan’s growth rate stood at three percent by June 2025, up from 2.6 percent the previous year, with GDP growth projected at 3.4 percent for the current fiscal year.
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