A Review of the Latest World Bank's Afghanistan Development Update (ADU)

Moheb Jabarkhail

June 10, 2026

The World Bank's latest development update on Afghanistan presents a striking paradox.  On the one hand, macroeconomic indicators point to resilience and modest recovery. On the other hand, poverty continues to deepen, and many Afghans are becoming poorer despite headline economic growth.

According to the report, Afghanistan's real GDP grew by approximately 4.8% in FY2025. Growth was driven primarily by services and industry, alongside stronger domestic revenue mobilization. Tax revenues reached nearly 20% of GDP, reflecting stronger domestic revenue mobilization and improved tax collection.

At first glance, these figures suggest an economy on a path toward stabilization. Yet the broader reality is more complex. Macroeconomic growth has not translated into meaningful improvements in living standards for most Afghans.

By the end of 2025, Afghanistan's population was estimated at 47.4 million, while GDP per capita stood at only $353. Since 2023, nearly five million Afghan refugees and migrants have returned from neighboring countries, particularly Pakistan and Iran. This rapid population increase has significantly outpaced economic growth, contributing to a 5.6% decline in GDP per capita and placing additional pressure on labor markets, housing, public services, and food systems.

At the same time, regional trade disruptions, poor agricultural harvests, and rising fuel costs linked to broader geopolitical tensions have pushed inflation above 7%, further eroding household purchasing power.

The World Bank's Afghanistan Development Update underscores a fundamental reality: while macroeconomic stability has improved, economic recovery remains insufficient to keep pace with the country's rapidly growing population and rising development needs.

Moving forward, Afghanistan's long-term economic prospects will depend less on short-term humanitarian assistance and more on its ability to attract private investment, strengthen market institutions, expand regional trade, and create productive employment opportunities. Achieving these objectives will require a coordinated approach that combines humanitarian support with targeted development interventions aimed at revitalizing the private sector and improving economic competitiveness.

The central question is whether Afghan institutions, development partners, and the private sector can work together to transform the country's demonstrated resilience into inclusive, sustainable, and broad-based economic growth that improves livelihoods for millions of Afghans.

In my view, the most significant finding of the report is not the 4.8% GDP growth rate, but the decline in GDP per capita. This highlights the growing gap between macroeconomic stability and household welfare. Unless economic growth accelerates beyond population growth, poverty reduction will remain elusive regardless of improvements in fiscal performance.

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Moheb Jabarkhail is the Founder of The Afghanistan Affairs, an independent platform dedicated to research and analysis on Afghanistan's economy and development. He is a policy researcher and international development professional with extensive experience in economic development, trade, private sector development, and regional integration. His work has supported governments, international organizations, and development partners in advancing sustainable economic growth and development outcomes in Afghanistan.