Afghanistan’s Economy Threatens to Slow Down in 2018

After two consecutive years of increasing economic growth, Afghanistan’s economic recovery threatens to slow down, according to the World Bank’s Afghanistan Development Update released on Tuesday.

The 2014 Afghan presidential election that saw proof of fraud after an investigation by the European Union caused political unrest and less consumer confidence, resulting in a sharp decrease of economic growth.

Afghanistan’s real GDP growth fell from more than 12 percent in 2012 to 1.3 percent in 2015 but has since started to rebound. Economic growth in 2017 was 2.7 percent, but it threatens to start decreasing again this year.

“With parliamentary elections coming later this year, and presidential elections coming in early 2019, we’ve seen a decline in business confidence, and some evidence of slowing activity,” said Tobias Haque, World Bank Senior Country Economist for Afghanistan.

The World Bank also cites drought and high temperatures hurting the agricultural industry as a reason for this potential decrease.

“With the population growing fast, economic growth needs to be much better to deliver better living standards,” said Haque.

Shubham Chaudhuri, World Bank Country Director for Afghanistan, said in a blog post that a key to sustaining recovery is confidence in the state’s ability to provide “core services” such as healthcare and basic education.

“At the current juncture, the most important priority for the government and its international partners is to maintain public confidence to support growth and job creation,” said Chaudhuri. “More than half of Afghans now live in poverty. We cannot afford to see the current momentum lost.”