Afghanistan’s economy in 2025 experienced significant shifts under the influence of a mix of domestic and international factors. The large-scale return of migrants, the consequences of climate change, the continued lack of international recognition of Taliban rule, and disruptions in trade relations with Pakistan exerted substantial pressure on the country’s economic structure. Nevertheless, rising trade with certain countries, ongoing international humanitarian aid, and the expansion of natural resource extraction shaped the trends and trajectory of Afghanistan’s economy during the year.
In 2025, Afghanistan’s economy continued to face severe pressures from a combination of domestic and external challenges. According to World Bank data, the country’s economic growth reached 4.3 percent, while inflation remained around 2 percent. Agricultural output increased, but so did unemployment, fueled by a rapidly growing population. Extreme poverty persisted among Afghan households, and the central bank’s frozen assets abroad continued to constrain economic stability.
The 2025 Global Multidimensional Poverty Index, released by the United Nations Development Program in collaboration with Oxford’s Human Development Initiative, reported that 64.9 percent of Afghanistan’s population lived in multidimensional poverty reflecting a deep, ongoing crisis affecting education, health, and living standards. Rising import prices and population growth of roughly 8 percent further intensified economic pressures.
Gross domestic product (GDP) grew by an estimated 4.6 percent, driven by nearly 6 percent growth in agricultural production compared with 2024. Key developments included expanded mining, construction activity, shifts in trade patterns and partners, and the continuation of humanitarian aid targeting returning migrants and victims of natural disasters.
The return of roughly 2.8 million migrants from Pakistan and Iran marked one of the most unprecedented social and economic events of the year, raising unemployment and increasing the number of impoverished families. Concurrently, earthquakes, consecutive droughts, and seasonal floods destroyed thousands of homes, damaged economic infrastructure, and contributed to widespread internal displacement, deepening the country’s economic crisis.
International assistance played a critical role in preventing a total economic collapse. Although U.S. aid was fully cut off in April 2025 following the election of Donald Trump, the European Union, Arab states, Japan, North Korea, Canada, and UN-affiliated agencies—including the World Bank, IMF, and the Organization of Islamic Cooperation—continued support. The United Nations’ 2025 humanitarian response required $2.42 billion but received only $1.07 billion. Still, the UN leveraged remaining resources from prior years to spend approximately $2.5 billion on returning migrants and over two million returnees, mainly from Pakistan and Iran, averting a complete humanitarian catastrophe.
Development aid remained limited, with less than $100 million from Afghanistan’s trust fund transferred to World Bank–managed accounts for projects in health, education, livelihoods, and agriculture. Overall, total aid humanitarian, development, and residual funds—was estimated at $2.8 to $3 billion in 2025, significantly lower than previous years, leaving millions deeper in crisis.
Nevertheless, these funds helped sustain a minimal economic base and partially offset the country’s trade imbalance. The intensified extraction of natural resources also emerged as a key economic trend. Gold and precious stones in Badakhshan, coal in Samangan, Baghlan, Takhar, and Bamyan, oil in Sar-e Pol, and emeralds in Panjshir saw increased production. Preliminary figures from the Taliban’s Ministry of Mines and Petroleum suggested total mineral revenue of 17.112 billion Afghanis in 2025.
In September 2025, the Taliban’s ministries of economy and mining announced the signing of 28 mining contracts worth $7.5 billion with domestic and foreign companies, though the actual implementation remains unclear.
Trade disruptions with Pakistan in the final quarter deprived Afghanistan of a key coal export market, which had previously yielded 13 to 15 billion Afghanis annually. The escalation of tensions with Pakistan reshaped Afghanistan’s trade routes. Domestic reports indicate that the halt of imports from Pakistan sharply increased prices for essential goods, with bananas and oranges in cities such as Kabul and Herat rising by as much as 110 percent. Meanwhile, the suspension of fruit and vegetable exports to Pakistan cost the Afghan economy roughly $50 million.
The trade cutoff also prompted Afghanistan to expand commerce with Iran, India, China, Russia, and Central Asian countries. While these new routes partially mitigated immediate trade challenges, they carried significant constraints: higher transit costs, reduced competitiveness, inadequate infrastructure, and ongoing political and legal uncertainty for investors, leaving the long-term impact on the Afghan economy uncertain.
