A recent United Nations report shows that Afghanistan’s economy grew by 2.7% over the past year, with its Gross Domestic Product (GDP) reaching approximately $17.5 billion—an increase of $3 billion compared to the previous year.
However, the World Bank’s latest analysis highlights serious economic challenges, including rising poverty, high unemployment, limited financial and revenue sources, weak consumer purchasing power, and increasing prices, all of which have severely impacted millions of Afghans.
The oversupply of domestic production alongside declining demand is pushing the economy toward deflation, further restricting economic growth.
Additionally, uncertain economic policies, financial isolation, and a lack of major investments continue to undermine Afghanistan’s economic stability.
The World Bank warns that the sharp decline in foreign aid could further weaken overall demand, placing even greater pressure on citizens and the national economy.
Given these challenges, how crucial is GDP growth for economic stability, and what does the future hold for Afghanistan’s economy?
Economic analyst Enayatullah Hammam shares his insights on the matter.
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