The next 2 years before the Government of Afghanistan assumes full responsibility for security in 2014 will be critical. Security and political uncertainties, including a presidential election, will weigh heavily on the direction the country takes. To ensure economic stability and a sound basis for transition, the government will have to fulfill commitments made under the Tokyo Mutual Accountability Framework and implement various policy and institutional reforms agreed under the current International Monetary Fund program.

Economic performance

Gross domestic product (GDP) growth is estimated to have accelerated to 11.9% in 2012, following 7.2% expansion a year earlier, entirely due to the strong performance of agriculture, as weather improved from a drought in 2011.

Private consumption buoyed by international aid flows, much of it related to security, remained the main source of growth. Aid fueled most of the demand for goods and services, especially in construction.

Source: ADB estimates.

Economic prospects

GDP growth is forecast at 3.3% in 2013 and 5.1% in 2014. Unusually slow growth in 2013 reflects the expectation that food crop production will be substantially lower than in 2012, when weather was unusually favorable, this base effect dragging down GDP growth overall. Afghanistan will go through a period of political and security uncertainty that is expected to weigh heavily on economic growth. Private consumption will slow but remain as the main source of growth. Industry and services are expected to grow more slowly as smaller international security forces may spend less.

Source: ADB. 2013. Asian Development Outlook 2013. Manila.

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