INSUBCONTINENT EXCLUSIVE:
The Afghan economy is showing signs of moderate growth, but still faces significant challenges, including fiscal constraints, trade
imbalances, and a limited capacity for public investment, the World Bank (WB) said Wednesday.According to the organization&s latest
Afghanistan Development Update, issued on Wednesday, &Afghanistan&s economic recovery remains uncertain&.Modest GDP growth of 2.7%, driven
by private consumption, has recouped only about 10% of past economic losses, indicative of the slow and fragile nature of the recovery, the
WB said.According to the organization, this level of growth has done little to address deeper structural issues and significant
vulnerabilities within Afghanistan&s economy.Enabling women&s participation in the economy, strengthening domestic resource mobilization,
maintaining price stability, and addressing critical deficits in human capital & particularly in education and healthcare, and especially
for women & will be essential for long-term recovery and reducing vulnerability to future shocks,& the WB said in a statement.Faris
Hadad-Zervos, World Bank Country Director for Afghanistan said: &Afghanistan&s long-term growth prospects depend on tapping into the
substantial potential of the domestic private sector and improving the overall business environment.Key to this is increased investment,
providing access to finance to small businesses, and supporting educated and skilled women entrepreneurs so their businesses can thrive
Without this, the country risks prolonged stagnation with limited prospects for sustainable development,& he said.Meanwhile, the partial
recovery, coupled with falling food prices, has contributed to a gradual improvement in household welfare.But most Afghan households
continue to struggle to meet basic needs and poverty remains widespread.Vulnerable groups, including women, children, and displaced
populations, continue to bear the brunt of the economic hardship, due to the lack of social protection mechanisms,& the WB stated.In
addition, Afghanistan&s trade dynamics remain a significant challenge.In 2023-24, the country&s exports remained stable, but imports surged,
leading to a widening trade deficit, the WB reported.The appreciation of the afghani (AFN) made imports cheaper, fueling demand for foreign
goods, while domestic industrial activity revived, increasing the need for imported inputs.However, the trade deficit, exacerbated by
Afghanistan&s reliance on imports for essential goods like fuel, food, and machinery, might pose a risk to the country&s economic stability,
the organization stated.The post Afghanistan&s economy shows modest growth but recovery remains fragile first appeared on Ariana News.
