The Afghanistan economic framework remains particularly complex and fragile. The World Bank and the UN agencies agree that, with the end of the Islamic Republic and the establishment of the Taliban government, there has been a significant deterioration of the Afghan economy. Various endogenous and exogenous factors contribute to keeping a large part of the population in poverty, especially in rural areas, discouraging investment and hindering the recovery of the private sector, the importance of which—as a driver for growth and job creation—was highlighted by the Independent Assessment presented by the UN Special Coordinator for Afghanistan to the Security Council (December 2023), known as the “Sinirlioglu Report”[1]
The relaunch of the private sector was also, along with the fight against drug trafficking, the subject of a dedicated discussion within the framework of the Third round of the Doha Process Conference on Afghanistan, held on June 30-July 1, 2024, under the auspices of the UN. At the meeting, chaired by USG Rosemary DiCarlo and attended for the first time by representatives of the de facto authorities, it was noted that there is a common interest between the international community and the de facto authorities to establish working groups to revive the private sector and consolidate the results achieved in countering drug trafficking. The working groups were convened in 2025 and 2026.
One of the most delicate issues is linked to the Afghan state funds frozen in the USA, in light of the sanctions in force against the Taliban. These funds, which today amount to 3.8 billion USD, are deposited in a trust fund established in Switzerland, in implementation of a US Treasury executive order. According to Art. 4 of the Statute of the Fund for the Afghan People, such funds could be used for purposes “for the benefit of the Afghan people,” including the stabilization of the exchange rate, control of inflation, liquidity of the banking sector, and public debt service.
The economic situation of Afghanistan today continues to be uncertain, also in light of the high country risk; however, the evolution of the political, security, and economic context must be monitored in the medium term, including possible manifestations of interest from foreign economic actors, especially at the regional level, given the relevance of Afghanistan in terms of geostrategic positioning, mineral resources, agricultural production, and demographic trends (49 million inhabitants, with a growing rate of aprox. 3%).
For regular updates on Afghanistan economy, please visit Italian Trade & Investment Agency Office to Doha covering also Afghanistan since January 2025 https://www.ice.it/it/mercati/afghanistan
[1] “The private sector, now the main driver of growth and employment opportunities, continues to face challenges related to international payments and market access while confronting a depressed domestic demand. The United Nations stands ready to play a constructive role in promoting private sector development, including through initiatives such as revitalizing the microfinancing sector, which can also help empower Afghan women, absorb the growing labour force and fight poverty”, cfr. para. 77 of the independent assessment on “the situation in Afghanistan and its implications for international peace and security”, 1 December 2023.