The IMF lauded the country’s gains under a just-concluded IMF-monitored program to close vulnerabilities with reforms in the government budget process and in the financial sector.
“Despite difficult circumstances, the authorities implemented the program successfully,” the IMF said in a statement.
But given the country’s ongoing domestic conflict and the drawdown of international military forces from the country, it said, “Afghanistan’s economic situation remains very difficult.”
The Washington-based global lender said that it expects the economy to grow only about two percent this year, barely faster than last year. And that pace is at risk to a further deterioration of security conditions and slowing donor aid.
On top of that, it added, the country’s banking system needs more reform to eliminate vulnerabilities.
The IMF said it will be discussing with Kabul authorities this month a new Extended Credit Facility loan the government requested to help it address some of these problems.
“The ECF would help tackle some of the challenges and thus assist in improving the conditions for sustainable growth and in catalyzing support from donors,” it said.