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The most revealing economic stories are often the ones that defy the headlines.
Sometimes the strongest measure of a country's future is not found in its GDP or trade figures, but in the quiet choices people make to keep moving forward.
This week's analysis examines one such paradox...
After decades of war and economic isolation, Afghanistan’s economy is showing surprising resilience. Yet the country’s most striking economic story may be unfolding among women.
Despite sweeping restrictions imposed by the Taliban on women’s education, employment and mobility, women-owned businesses have surged from around 600 to more than 10,000 since 2021, and tens of thousands more women run informal businesses.
Overall, the economy is projected to grow by around 4 percent in 2026, supported by domestic demand, trade with Iran and Central Asian neighbours, and gradual recovery in agriculture, small-scale mining and services. Domestic revenue collection has also strengthened, reaching 19.8 percent of GDP in 2025.
But economic growth is failing to translate into better living standards. Afghanistan’s population grew by around 11 percent in 2025, driven largely by the return of nearly 3.7 million Afghans from neighbouring countries.
Population growth has outpaced economic expansion, causing GDP per capita to fall by 5.6 percent. Inflation, after averaging 3.6 percent, rose to 7.6 percent by March 2026, pushed by food prices, supply constraints and rising demand. The influx of returnees is putting additional pressure on jobs, housing and food security, while poverty and severe food insecurity remain widespread.
The economy also remains heavily constrained by its weak external position. Strong import demand and poor export performance pushed the current account deficit to an estimated 36.1 percent of GDP in 2025.
The private sector has shown some resilience, with sales, employment and investment improving since 2022, but unreliable electricity, limited access to finance and widespread informality continue to hold businesses back.
Meanwhile, shrinking international humanitarian aid and declining external grants are restricting investment in infrastructure and limiting Afghanistan’s ability to withstand economic shocks.
Against this difficult backdrop, women’s entrepreneurship stands out as an unexpected source of economic activity. Women are increasingly running home-based businesses in tailoring, handicrafts, food processing, carpet weaving and textiles, while platforms such as Instagram and Facebook help them reach customers despite restrictions on public storefronts. Yet their potential remains severely constrained.
Around two-thirds of women-led businesses operate informally, while only about 5 percent of women entrepreneurs have access to bank or microfinance loans because of collateral and guarantor requirements. Mobility restrictions, male-guardian requirements in some contexts and bans on mixed-gender workplaces further limit expansion.
Afghanistan’s economic story, therefore, is one of growth without broad-based prosperity, and resilience emerging in places where the restrictions are greatest.
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