Economic growth in 2024; youth unemployment remains the main problem

Afghan Voice Agency (AVA) - Kabul: The World Bank, publishing a new report on the country's economic situation, said that the country's gross domestic product grew by 2.5 percent in 2024; a growth that was mostly due to activities in the agriculture, mining, construction and trade sectors.

 

The report states that despite this limited growth, the manufacturing and services sectors continue to face serious challenges. An unfavorable business environment, export barriers and a sharp decrease in foreign aid are cited as the most important factors behind the slowdown in these sectors.

 

According to the World Bank, despite some improvements in real estate and private sector investment, increasing imports have led to a widening of the country's trade deficit. Also, while the population is growing rapidly, per capita income in the country has stagnated, and this, along with poverty and food insecurity, has fueled the unemployment crisis.

 

The World Bank has warned that risks to economic stability, including wage declines, investment volatility, and inflation, continue, and that urgent interventions and policy reforms are needed to avoid a prolonged economic downturn.

 

The World Bank’s representative in Kabul, Faris Haddad Zarwas, said that the country’s banking system remains fragile, and that restrictions on lending and a lack of liquidity have exacerbated the need for deep financial reforms.

 

An important part of the report is dedicated to the situation of youth. According to the World Bank, unemployment in Afghanistan has doubled, especially among the youth. In 2023, almost a quarter of the country’s youth population (15-29 years old) will be unemployed.

 

The World Bank also noted that a large number of young people who do have jobs are also engaged in informal, low-paying, and unstable jobs, which in the long term undermines their economic security and labor market dynamism.

 

The World Bank added: “Youth are a source of resilience and untapped potential, but their employment is a significant challenge that requires urgent attention.”

 

According to experts, while Afghanistan’s economic growth of 2.5 percent for 2024 can be seen as a glimmer of hope for the future, this growth, contrary to expectations, has failed to have a positive impact on general livelihoods, youth employment, and social well-being.

 

The stagnation of per capita income, the intensification of poverty, and the spread of unemployment, especially among the youth, indicate that economic growth will be ineffective without job creation and economic justice.

 

Given the country’s young demographic composition, this unemployment crisis could become one of the most significant security, social, and migration threats. Creating opportunities for youth and strengthening technical and vocational education infrastructure, along with banking reforms and removing investment barriers, should be prioritized in economic policymaking.