Afghanistan shows fragile recovery amid deepening poverty: World Bank
Afghanistan’s economy is showing signs of modest recovery, but poverty, mass displacement, and humanitarian needs continue to overwhelm it
KABUL, Afghanistan (MNTV) – Afghanistan’s economy is showing signs of modest recovery, but poverty, mass displacement, and humanitarian needs continue to overwhelm the country, according to the World Bank’s latest Middle East, North Africa, Afghanistan, and Pakistan (MENAAP) Economic Update.
The report projects Afghanistan’s GDP to grow by 4.3% in fiscal year 2025/26, largely driven by consumption. However, with the population expected to rise 8.6%, per capita income is forecast to decline by 4%, leaving millions in poverty.
“Sustained population growth and an oversupply of low-skilled labor will continue to limit per capita gains, making poverty reduction difficult,” the report noted.
Between 15.2 million and 23.8 million Afghans — roughly half the population — live in extreme poverty, surviving on less than $3 a day. That represents up to a quarter of the region’s total extreme poor, according to revised World Bank estimates.
The analysis highlights compounding crises including mass deportations, natural disasters, and weak governance. Since September 2023, over 4 million Afghans have returned from Pakistan and Iran, many through forced repatriations. The sudden influx, combined with limited jobs and shrinking aid, has further strained public services and the labor market.
The August 2025 earthquake in eastern Afghanistan — the deadliest since 1998 — killed more than 2,000 people and caused $183 million in damage, destroying homes and livestock in rural areas.
The World Bank said restrictions and social norms have forced many Afghan women into “informal, precarious work.” While female labor participation has increased slightly since the Taliban’s return, most jobs remain low-paying and home-based. The share of inactive women fell from 86% in 2020 to 57% in 2023, but overall unemployment remains high.
Regionally, the report warns that women’s underrepresentation in the workforce remains one of the most severe economic constraints across MENAAP, where only one in five women works in formal employment — the lowest rate globally.
“Increasing female labor participation could boost GDP per capita by 20–30% in economies like Egypt, Jordan, and Pakistan,” said Roberta Gatti, the World Bank’s chief economist for the region.
Ousmane Dione, the World Bank’s vice president for MENAAP, urged governments to adopt “bold, comprehensive measures” to remove barriers to women’s employment, calling a stronger private sector “key to real progress.”
Despite moderate growth, the Bank cautioned that Afghanistan’s recovery remains highly fragile. Persistent fragility, sanctions, and limited recognition continue to block sustainable development.
“Humanitarian needs are rapidly rising, while domestic capacity to cope remains severely limited,” the report warned. “Without structural reforms and inclusive policies, millions of Afghans — particularly women and returnees — will remain trapped in poverty.”
Have Your Say!
Have you been affected by the issues raised in this story? Please share your experiences by emailing haveyoursay@soundvision.com.
Please include a contact number if you are willing to speak to a Muslim Network TV’s representative. You can also get in touch in the following ways:
Tweet: @MuslimNetworkTV
We must take charge of our narrative. Research indicates that 92% of their Muslim coverage is negative. Help us change that.
