World Bank: Afghan Economy Suffers from Drought and Uncertainty, 1% Growth Rate in 2018

According to a World Bank report, Afghanistan’s economy suffers from the consequences of a severe drought and insecurity. Although Afghanistan is supposed to recover slightly in 2019 due to improved weather conditions, but growth is expected to remain fragile, says the report.

In 2018, the Afghan economy only grew an estimated 1% due to ongoing violence and drought, which was the slowest growth rate since 2001, the report said.

The slowed growth is partly attributed to severe drought last year had a strong negative which impact on
agricultural production.

In Afghanistan, almost 80 per cent of the population is engaged in agriculture for their livelihoods, making slight changes in agriculture production extremely vulnerable to the population.

At the same time, business and investor confidence deteriorated significantly due to the uncertainty around international security
assistance, intensified conflict and ongoing talks about peace with the Taliban. As a result, the World Bank also estimates that poverty has deepened. In an earlier report for 2016-17, the World Bank reported that out of an estimated 30 million Afghans, some 54.5 per cent, were living below the poverty line.

Economic growth is estimated to recover in 2019 to 2.5 per cent.

In the past, the heavy presence of international troops had created a “bubble” economy between 2003 and 2013, which faced a sharp decline when the majority of the forces started leaving Afghanistan in 2014.

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