Afghanistan Development Update, June 2019 : Building Confidence Amid Uncertainty
Afghanistan faced severe economic headwinds in 2018, with the economy growing by an estimated 1.8 percent. Slow growth was driven by two major factors. Firstly, severe drought had a strong negative impact on agricultural production. Agricultural gr...
| Main Author: | |
|---|---|
| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/546581556051841507/Building-Confidence-Amid-Uncertainty http://hdl.handle.net/10986/32144 |
| Summary: | Afghanistan faced severe economic
headwinds in 2018, with the economy growing by an estimated
1.8 percent. Slow growth was driven by two major factors.
Firstly, severe drought had a strong negative impact on
agricultural production. Agricultural growth slowed to 0.8
percent as low snowfall during late 2017 and early 2018 led
to the loss of grain crops and livestock productivity.
Secondly, business and investor confidence deteriorated
significantly in the context of elevated uncertainty around:
i) the level and duration of international security
assistance; ii) the outcome of upcoming presidential
elections (now delayed until September); iii) prospects of
continued or worsening election-related violence (civilian
deaths reached their highest level since 2001); and iv)
ongoing peace negotiations with the Taliban. Real GDP growth
is expected to have accelerated during the first half of
2019, mainly driven by the easing of drought conditions and
improved agricultural production. Intensifying political
uncertainties, however, are expected to have continued to
dampen private sector confidence and investment. Poverty is
estimated to have increased and deepened. The rate of
economic growth substantially lagged population growth,
leading to declining per capita incomes. The drought
negatively impacted livelihoods of many of the 82 percent of
the poor living in rural areas, including those reliant on
poppy cultivation (poppy production declined by 30 percent).
Reflecting widespread hardship, drought-induced displacement
reached record levels of 298,582 individuals, mainly to
urban areas in adjacent provinces. |
|---|