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World Bank Says Afghanistan Growth To Improve Despite Headwinds

Afghanistan's economic growth is expected to improve this year with easing of drought conditions but cautioned that the region faces strong headwinds to growth, the World Bank said in its Afghanistan Development Update.

The economy grew only around 2 percent in 2018, leading to further increases in poverty and deterioration in living standards, the lender noted.

"Afghanistan faces challenges of insecurity, election-related political uncertainty, potential declines in international security support, in addition to the drought in 2018," World Bank Afghanistan Country Director Henry Kerali, said.

"Any one of these shocks would normally generate strong headwinds to growth. Afghanistan has faced all of these concurrently," Kerali added.

The economic growth is expected to accelerate to 2.5 percent in 2019, underpinned by government policies and limited fiscal deficit.

The bank observed that slow growth reflects the impact of negative shocks rather than deterioration in government policy. The government has maintained progress with reforms even during difficult times.

Growth is forecast to improve further to 3.2 percent in 2020 and to 3.5 percent in 2021.

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