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Asia and Oceania

Afghanistan Flag of Afghanistan

Last reviewed: 6 January 2009

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ECONOMY

Basic Economic Facts

GDP:  US$6.3 billion in 2007/8. Per capita GDP has increased from US$200 to US$348 since 2002. (UNAMA, June 2008)
Growth Rate: Real GDP growth has averaged 14.8% in the last six years. The inflation rate was 4.8% in 2006/7. Despite ongoing security problems, Afghanistan has been able to sustain a strong economic growth rate, ranging from 26% in 2002/3 to 14% in 2005/6. The growth rate slowed in 2006/7 due to drought, but is expected to pick up pace again this year, remaining above the average for post-conflict, land-locked countries. (UNAMA, June 2008)
Principal industries: Textiles, fruit and nuts, soap, furniture, shoes, fertiliser, hand woven carpets, cement, natural gas, coal and copper
Major trading partners: Exports to Pakistan, the EU, India, Russia and the United Arab Emirates; imports from Pakistan, Japan, Kenya, South Korea, India and Turkmenistan
Exchange rate: 70 Afghanis = 1GBP (xe.com January 2009)

Afghanistan’s economy has been seriously damaged by decades of war. The main activity remains agriculture (which involves around 80% of the population), both subsistence and some commercial. The main traditional crops are grain, rice, fruit, nuts and vegetables. But all have been severely affected by drought in recent years. Industry is small scale and includes handicrafts, textiles, carpets, and some food processing. Exports consist of mainly fruit, nuts, vegetables and carpets.

In December 2005 the UK, as G8 President, co-hosted, alongside the Afghan Government, a Regional Economic Cooperation Conference (RECC) in Kabul aimed at exploring practical means for Afghanistan to increase economic cooperation and trade with its neighbours. G8 countries, India, Turkey, Gulf States and International Financial Institutions participated at Ministerial, or equivalent, level.

In April 2007 Afghanistan became the eighth member of the South Asia Association for Regional Co-operation (SAARC), a regional platform for improved economic and social development in South Asia.

Lord Malloch-Brown with President KarzaiAfghanistan possesses a wide variety of mineral resources including natural gas, coal, oil and gemstones, but the security situation has precluded their effective utilisation. Drugs, mainly opium, dominate illegal exports and, coupled with smuggling to adjacent countries, underpin a large black economy.

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