INSUBCONTINENT EXCLUSIVE:
The Afghan economy is expected to hover around no-growth territory this year, amid uncertainty after contracting by 25% since August 2021,
while Islamic Emirate of Afghanistan&s (IEA) restrictive policies on women&s education and work will further lower the country&s growth
prospects, says the World Bank in a report released Tuesday.The report titled Uncertainty After Fleeting Stability, shows how Afghanistan&s
economic downturn has affected all sectors
Services, which make up 45% of the country&s GDP, shrank by 6.5% last year, following a staggering 30% drop in 2021
The agriculture sector, which accounts for 36% of GDP, declined by 6.6% in 2022 due to unfavorable weather conditions and farmers& lack of
resources to cope.The industrial sector also saw a contraction of 5.7% last year, as businesses—especially those owned by women—faced
closures due to limited access to resources and financial challenges
Following a record high in 2022, exports have been declining this year while imports remain robust, resulting in a growing trade deficit,
the World Bank said.Dampened demand, better supply conditions, and a stronger currency caused inflation to sharply decline from its 18.3%
peak last July, leading to deflation since April 2023
Although deflation may initially increase real wages, prolonged deflation could stifle business growth and increase unemployment, the bank
warned.A potential reduction in international aid due to fiscal pressures in donor countries and the restrictive policies on women and girls
pose risks to Afghanistan&s recovery, as do concerns about stability of the banking sector and dysfunctional payments system, the report
said.&Afghanistan&s economy is fragile, relies heavily on external support and its private sector is weak,& said Melinda Good, World Bank
Country Director for Afghanistan
&To recover, the country needs to prioritize spending on human capital, basic services and climate resilience and address harmful gender
policies.&According to the World Bank&s latest Afghanistan Welfare Monitoring Survey, also released Tuesday,one in two Afghans remain poor
and recent gains in welfare have come at the cost of possibly exhausting all coping strategies and household resources.Since the economic
crash of 2021, households report an improvement in their capacity to meet basic needs, but deprivation and vulnerability remain high
Afghan households have mobilized extra labor to make ends meet, mainly among youth and women
The overall increase in labor supply has outpaced demand, doubling unemployment.While improved security has increased primary school
attendance and narrowed gender and rural-urban gaps, millions of primary-school-age girls and boys remain out of school mainly due to a lack
Since the ban on female secondary school attendance was imposed, only 3% of girls attend secondary school
Among boys aged 13-18, only 44% are receiving a secondary education, World Bank said.&Afghanistan&s future growth potential hinges on
What is happening to secondary education is a cause of grave concern,& added Good
&Almost no girls and less than half of the country&s boys are getting a secondary education
Where will the teachers and doctors of tomorrow come from? A country cannot grow if it willingly foregoes the potential of its citizens.&The
post Afghanistan&s contracted economy faces uncertainty: World Bank first appeared on Ariana News.
