Afghanistan's overall economic performance is strong and shows signs of steady growth despite significant challenges including pervasive poverty, a growing opium trade and rampant security threats, the International Monetary Fund said late Monday. In a review of Afghanistan's economy since the country's first presidential election in October, the IMF commended the new economic team for "appropriate oversight and control" of fiscal and monetary policies.
But the Washington-based lender warned that Kabul still faces very difficult policy issues, including the need to modernise its banking system, improve on revenue collection and maintain a sound and sustainable fiscal policy.
"Consistent with its strong track record, the government of Afghanistan has met all quantitative indicators and structural benchmarks" except those related to banking laws, the IMF said in a statement.
But Afghanistan, recovering from 20 years of ruinous civil war, still faces a difficult road ahead, the IMF said.
"Economic growth remains fragile, provision of government services remains weak, drug-related activities have increased, security remains a concern, barriers to private investment are still significant and poverty remains pervasive."
The United Nation estimates drug exports account for more than 60 percent of Afghanistan's economy, and despite the government's efforts at a crackdown, Afghan opium output from areas still controlled by warlords and insurgents has surged to near-record levels since US-led troops toppled the Taleban government in 2001.