Afghanistan Economy Profile 2006

Economy - overview

Afghanistan's economic outlook has improved significantly since the fall of the Taliban regime in 2001 because of the infusion of over $8 billion in international assistance, recovery of the agricultural sector and growth of the service sector, and the reestablishment of market institutions. Real GDP growth is estimated to have slowed in the last fiscal year primarily because adverse weather conditions cut agricultural production, but is expected to rebound over 2005-06 because of foreign donor reconstruction and service sector growth. Despite the progress of the past few years, Afghanistan remains extremely poor, landlocked, and highly dependent on foreign aid, farming, and trade with neighboring countries. It will probably take the remainder of the decade and continuing donor aid and attention to significantly raise Afghanistan's living standards from its current status, among the lowest in the world. Much of the population continues to suffer from shortages of housing, clean water, electricity, medical care, and jobs, but the Afghan government and international donors remain committed to improving access to these basic necessities by prioritizing infrastructure development, education, housing development, jobs programs, and economic reform over the next year. Growing political stability and continued international commitment to Afghan reconstruction create an optimistic outlook for continuing improvements in the Afghan economy in 2006. Expanding poppy cultivation and a growing opium trade may account for one-third of GDP and looms as one of Kabul's most serious policy challenges. Other long-term challenges include: boosting the supply of skilled labor, reducing vulnerability to severe natural disasters, expanding health services, and rebuilding a war torn infrastructure.

GDP (purchasing power parity)

$21.5 billion (2004 est.)

GDP (official exchange rate)

$7.095 billion

GDP - real growth rate

8% (2005 est.)

GDP - per capita (PPP)

$800 (2004 est.)

GDP - composition by sector

agriculture: 38%
industry: 24%
services: 38%
note: data exclude opium production (2005 est.)

Population below poverty line

53% (2003)

Household income or consumption by percentage share

lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices)

16.3% (2005 est.)

Labor force

15 million (2004 est.)

Labor force - by occupation

agriculture: 80%
industry: 10%
services: 10% (2004 est.)

Unemployment rate

40% (2005 est.)

Budget

revenues: $269 million
expenditures: $561 million; including capital expenditures of $41.7 million
note: Afghanistan has also received $273 million from the Reconstruction Trust Fund and $63 million from the Law and Order Trust Fund (FY04-05 budget est.)

Industries

small-scale production of textiles, soap, furniture, shoes, fertilizer, cement; handwoven carpets; natural gas, coal, copper

Industrial production growth rate

NA%

Electricity - production

905 million kWh (2003)

Electricity - consumption

1.042 billion kWh (2003)

Electricity - exports

0 kWh (2003)

Electricity - imports

200 million kWh (2003)

Oil - production

0 bbl/day (2003)

Oil - consumption

5,000 bbl/day (2003 est.)

Oil - imports

NA bbl/day

Oil - exports

NA bbl/day

Oil - proved reserves

0 bbl (1 January 2002)

Natural gas - production

50 million cu m (2003 est.)

Natural gas - consumption

50 million cu m (2003 est.)

Natural gas - exports

0 cu m (2001 est.)

Natural gas - imports

0 cu m (2001 est.)

Natural gas - proved reserves

99.96 billion cu m (1 January 2002)

Agriculture - products

opium, wheat, fruits, nuts; wool, mutton, sheepskins, lambskins

Exports

$471 million; note - not including illicit exports or reexports (2005 est.)

Exports - commodities

opium, fruits and nuts, handwoven carpets, wool, cotton, hides and pelts, precious and semi-precious gems

Exports - partners

US 25.3%, Pakistan 20.9%, India 20.8%, Finland 4% (2005)

Imports

$3.87 billion (2005 est.)

Imports - commodities

capital goods, food, textiles, petroleum products

Imports - partners

Pakistan 23.9%, US 11.8%, Germany 6.8%, India 6.5%, Turkey 5.1%, Turkmenistan 5%, Russia 4.7%, Kenya 4.4% (2005)

Debt - external

$8 billion in bilateral debt, mostly to Russia; Afghanistan has $500 million in debt to Multilateral Development Banks (2004)

Economic aid - recipient

international pledges made by more than 60 countries and international financial institutions at the Berlin Donors Conference for Afghan reconstruction in March 2004 reached $8.9 billion for 2004-09

Currency (code)

afghani (AFA)

Exchange rates

afghanis per US dollar - 541 (2005), 48 (2004), 49 (2003), 41 (2002), 66 (2001)
note: in 2002, the afghani was revalued and the currency stabilized at about 50 afghanis to the dollar; before 2002, the market rate varied widely from the official rate

Fiscal year

21 March - 20 March