Afghanistan country profile
Afghanistan's economy faces significant challenges, marked by dependence on international aid, a large trade deficit, and vulnerabilities to climate change and political instability.
Landlocked and mountainous, Afghanistan has suffered from such chronic instability and conflict during its modern history that its economy and infrastructure are in ruins, and many of its people are refugees.
The Taliban, who imposed strict Islamic rule following a devastating civil war, were ousted by a US-led invasion in 2001, but made a rapid comeback to take over almost all of the country after US forces left in 2021.
Though the war ended with the Taliban takeover, there are attacks on the Taliban by Islamic State, as well as an anti-Taliban insurgency in some areas.
ISLAMIC EMIRATE OF AFGHANISTAN: FACTS
Capital: Kabul
Area: 652,867 sq km
Population: 38.3 million
Languages: Pashto, Dari
Life expectancy: 63 years (men) 66 years (women)
LEADER
Taliban leader : Hibatullah Akhundzada
Hibatullah Akhundzada became the supreme commander of the Taliban in 2016, and is now head of state of the interim government in Kabul, called the Islamic Emirate of Afghanistan.
He fought in the resistance to the Soviet military occupation in the 1980s, and went on to lead the Islamic courts during the Taliban's last period in government in 1996-2001.
MEDIA
Afghan media have faced difficulties since the Taliban took power in Kabul in August 2021.
Outlets have endured severe restrictions, an economic crisis and waning Western support.
There is growing self-censorship and editorial appeasement of the Taliban. Freedom of expression has largely disappeared.
TIMELINE
Image caption,Soviet troops withrew after a bloody decade fighting the Afghan resistance
Some key dates in Afghanistan's history:
18th Century - The modern state of Afghanistan begins with Ahmad Shah Durrani (ruled 1747-1772) and the Durrani Afghan Empire that at its maximum encompasses northern India and eastern Iran.
1826 - With the decline of Durrani dynasty Dost Mohammad Khan Barakzai becomes Emir of Afghanistan.
1839-42 - First Anglo-Afghan War: British initially successfully invade, deposing Dost Mohammad and replacing him with the former emir Shah Shujah but the British forces are almost completely massacred during their retreat.
1878-80 - Second Anglo-Afghan War: British invade forcing Amir Sher Ali Khan to flee. Ali's successor signs a peace treaty but after the massacre of a British diplomatic mission fighting restarts. The Afghans defeat a British force at the Battle of Maiwand but the British decisively defeat the Afghans outside Kandahar to end the war.
1893 - Durand Line established as the border between British India and the Emirate of Afghanistan by British diplomat Mortimer Durand and Afghan Emir Abdur Rahman Khan. However, the exact line of the border remain remains disputed.
1919 - Third Anglo-Afghan War: Afghanistan invades British India. Peace treaty results in Afghanistan gaining control of its foreign affairs from Britain.
1926 - Emir Amanullah Khan declares himself king and the Emirate of Afghanistan becomes the Kingdom of Afghanistan.
1928-29 - Afghan civil war: Facing armed opposition to his reforms, King Amanullah abdicates. Kabul is temporarily captured by opposition forces, who are defeated by Prince Mohammed Nadir Shah, Amanullah's cousin.
1933 - King Nadir Shah adopts more gradual approach to modernization, but is assassinated. Mohammed Zahir Shah reigns as king from 1933 to 1973, pursuing a policy of neutrality.
1973 - Mohammed Daoud Khan deposes the king in a bloodless coup and becomes Afghanistan's first president.
1978 - Communists under Nur Muhammad Taraki seize power in a coup against President Mohammed Daoud Khan. They start land distribution reforms and oppress political dissent, provoking strong opposition which quickly expands into civil war.
1979 - Taraki is assassinated in a power struggle led by then-prime minister Hafizullah Amin. Displeased with Amin's government, the Soviet Union invades, capturing Kabul and killing Amin, installing a more complaint communist regime.
1979-89 - Soviet-Afghan War: Soviet troops in substantial numbers are sent to stabilize Afghanistan marking the beginning of a bitter war.
The US and Pakistan send military aid to resistance groups. Between 560,000 and two million Afghans are killed, six million become refugees.
1989 - Soviet forces leave and Afghanistan collapses into renewed civil war. Some 400,000 Afghans are estimated to have been killed between 1990-2001.
1996 - Taliban seize control of Kabul and impose hard-line version of Islam.
2001-2021 - War in Afghanistan: The United States, including Nato and other allies intervene militarily following September 11 attacks on the US. The Taliban are ousted from Kabul and Hamid Karzai becomes head of an interim power-sharing government.
The war becomes the United States' longest military engagement as the Taliban regroup and regain control of large areas of the countryside.
2014 - Nato formally ends its combat mission in Afghanistan, handing over to Afghan forces - supported by US troops - who face a growing insurgency. Between 176,000-212,000 people are killed in the 20-year war.
2020 - Unable to defeat the Taliban militarily, the US and Taliban sign the Doha Agreement: US troops will withdraw, in return for which Afghan territory will not be used for militant attacks against the US and its allies.
2021 - Taliban recapture Kabul after US forces withdraw.
Image caption,Western troops failed to stabilise the conflict-ridden country
The BBC
Overview
Afghanistan's economy faces significant challenges, marked by dependence on international aid, a large trade deficit, and vulnerabilities to climate change and political instability. While modest growth is projected for 2025 and 2026, the recovery remains fragile. The country is heavily reliant on imports for essential goods, and its domestic production and job creation are weak.
Key Aspects of the Afghan Economy:
GDP Growth:
The Asian Development Bank forecasts a 2.6% GDP growth in 2025, followed by 2.2% in 2026.
Inflation:
Inflation is expected to be negative in 2025 (-5.3%) and then rise to 5.0% in 2026.
Trade:
Afghanistan has a large trade deficit, with imports outpacing exports, though the Afghani's appreciation has made imports cheaper.
Dependence on Aid:
The country relies heavily on foreign aid and assistance, and the reduction in aid has impacted the economy.
Fragile Recovery:
The economic recovery is fragile and faces challenges like political uncertainty, the ongoing economic crisis, and climate disruptions.
Informal Economy:
The informal sector and rural areas are not well-captured in national accounts, potentially underreporting the true scale of economic activity.
Mineral Resources:
Afghanistan possesses significant mineral resources, including iron ore, copper, aluminum, and rare earth elements, which could be a potential source of future growth.
Role of Women:
The long-term economic health of Afghanistan depends on the ability of women to participate in the workforce and contribute to the economy.
Need for Diversification:
Diversifying the economy away from dependence on aid and imports is crucial for sustainable growth.
Economy of Afghanistan
Article Talk
The economy of Afghanistan is listed as the 124th largest in the world in terms of nominal gross domestic product (GDP), and 102nd largest in the world in terms of purchasing power parity (PPP). With a population of around 41 million people, Afghanistan's GDP (nominal) stands at $14.58 billion as of 2021, amounting to a GDP per capita of $363.7 (according to a World Bank report). Its annual exports exceed $2 billion, with agricultural, mineral and textile products accounting for 94% of total exports.The nation's total external debt is $1.4 billion as of 2022.
Economy of
Afghanistan
Kabul, the economic capital of Afghanistan
Currency
Afghani (AFN)
Fiscal year
21 December – 20 December
Trade organizations
ECO, SAARC, SCO (observer) and WTO
Country group
Developing/Emerging
Low-income economy
LDC
Statistics
Population
Increase 41,480,304 (2023)
GDP
Decrease $14.58 billion (nominal; 2021)
Decrease $67.13 billion (PPP; 2021)
GDP rank
124th (nominal; 2021)
102nd (PPP; 2021)
GDP growth
1.8% (2018)
2.9% (2019e)
−5.5% (2020f)
1.0% (2021f)
GDP per capita
Decrease $364 (nominal; 2021)
Decrease $1674 (PPP; 2021)
Source: Wikipedia