Afghanistan’s Socioeconomic Crisis Worsens Despite Modest Growth, UNDP Warns

Despite a rare moment of modest economic growth in 2023–2024, Afghanistan’s path to recovery remains precarious and uncertain.

 

A new report released today by the United Nations Development Programme (UNDP) paints a bleak picture of Afghanistan’s socioeconomic trajectory, highlighting a nation grappling with deepening inequalities, an increasingly fragile economy, and the disproportionate burden borne by women, rural populations, and displaced communities. Despite a rare moment of modest economic growth in 2023–2024, Afghanistan’s path to recovery remains precarious and uncertain.

A Fragile Economic Recovery Undermined by Trade Imbalance

Afghanistan saw a modest GDP growth of 2.7 percent for the first time since 2019, a potentially hopeful signal in a decade marred by conflict, political upheaval, and isolation from international financial systems. However, this growth is overshadowed by a ballooning trade deficit, which surged to $6.7 billion in the first three quarters of 2024—up significantly from $5.1 billion in the same period the year prior.

The widening gap underscores chronic structural weaknesses: minimal domestic production capacity, insufficient job creation, and a continued overreliance on imports and humanitarian aid. The country's manufacturing and agricultural sectors remain underdeveloped, and many Afghans rely on informal work or subsistence farming, both of which offer little economic security.

Poverty Deepens, Especially Among Vulnerable Groups

The report reveals an alarming rise in subsistence insecurity, affecting 75 percent of the population in 2024—an increase of six percentage points over 2023. Access to essentials such as adequate housing, healthcare, and affordable goods has deteriorated markedly. Many families have been forced to reduce their food consumption, forgo health services, or pull children from school in order to survive.

Rural communities, which house 71 percent of Afghanistan’s population, have been particularly hard-hit. These regions suffer from chronic neglect, limited access to clean water and sanitation, and sparse healthcare infrastructure. Internally displaced persons (IDPs) and female-headed households report the steepest declines in income and household expenditure, further exposing their vulnerability to economic and climate shocks.

Nine out of ten Afghan households reported drawing down their daily consumption and spending in response to the ongoing crisis. This coping mechanism has led to weakened resilience and increased dependency on aid, perpetuating the cycle of poverty.

Gender Inequality Reaches Alarming Levels

The report dedicates a significant focus to gender disparities, warning that Afghanistan is facing an unprecedented rollback of women’s rights. Ongoing restrictions on women’s and girls’ education and employment have pushed female participation in public life to record lows. These restrictions are not only a violation of basic human rights but are also having a material impact on the country’s economy.

According to UNDP estimates, gender-based restrictions are expected to cost the Afghan economy close to $920 million between 2024 and 2026. Women-led households, now increasingly marginalized, face extreme barriers to employment, business opportunities, and basic social services.

“The continuation of this deeply troubling trajectory extends the unbearable plight of women and girls, who are already the furthest behind,” said Kanni Wignaraja, UN Assistant Secretary-General and UNDP’s Regional Director for Asia and the Pacific.

Humanitarian Aid is Not Enough—A Call for Sustainable Development

UNDP officials emphasize that while humanitarian support remains critical, it is insufficient on its own to lift Afghanistan out of long-term economic decline. Stephen Rodriques, UNDP’s Resident Representative in Afghanistan, stated, “Sustainable, longer-term economic and social solutions are urgently needed. Lifting the current restrictions on women is critical to ensure their well-being, preserve their basic human rights, and stimulate badly needed economic growth.”

The report outlines a multipronged strategy to build resilience and reduce Afghanistan’s dependence on foreign aid. Key recommendations include:

• Targeted support for women-led businesses and micro, small, and medium enterprises (MSMEs)

• Investment in agricultural value chains to boost local production

• Development of sustainable livelihoods in eco-fragile and rural regions

• Expansion of social protection systems to cover vulnerable groups

• Restoration of education and employment rights for women and girls

Returnees and Shrinking Aid Add Pressure

The crisis is likely to worsen in the coming months, as the country anticipates the return of hundreds of thousands of Afghan nationals from neighboring countries. This influx will place additional strain on already stretched resources and services, particularly in provinces with limited infrastructure and economic opportunity.

Meanwhile, reductions in international assistance, once a vital lifeline for millions, compound these pressures. As aid funding dwindles, the urgency for a sustainable development agenda grows more pronounced.

 

The UNDP report serves as a stark reminder that Afghanistan is at a critical juncture. Without bold and inclusive policy changes—especially those that lift restrictions on women and bolster rural development—the country risks entrenching poverty and inequality for generations. While modest GDP growth offers a glimmer of hope, only comprehensive and sustained interventions can prevent further humanitarian deterioration and chart a viable path to recovery.