Afghanistan growth prospects down as aid declines: World Bank

KABUL: Afghanistan´s growth is expected to slow in 2025 following a drop in foreign aid, the World Bank warned on Wednesday, with assistance still crucial for the country as it grapples with one of the world´s worst humanitarian crises.

The South Asian country´s economy made modest gains in 2024 -- the second year of growth since the Taliban takeover in 2021 -- due to sectors including agriculture, mining and construction, as well as easing deflationary pressures, the Bank said in a report.

Despite the expansion, it warned Afghanistan´s “economic outlook remains fraught with significant risks”.

“While Afghanistan´s economy is showing signs of recovery, it continues to be held back by significant fiscal challenges, with domestic revenue mobilisation proving insufficient to offset a decline in aid,” World Bank country director Faris Hadad-Zervos said in a statement.

Afghanistan´s GDP is estimated to have grown 2.5 percent in 2024, according to the Bank, but “economic growth is expected to slow to 2.2 percent in 2025 amid aid disruptions before gradually recovering to 2.5 percent in 2026- 27”, the report said.

Afghanistan faces the second-largest humanitarian crisis in the world, after Sudan, following four decades of war and crises, according to the United Nations.