Afghanis-tan's economy is set to grow 14 percent in 2005/06 with inflation pressures easing, the International Monetary Fund said on Friday.
The Washington-based lender said rebounding output and moderate inflation, likely to slow to 10 percent year-over-year by year-end, had brightened the country's prospects but warned there was much left to do to reinforce the economy.
"Afghanistan still faces formidable challenges, such as lingering insecurity, the effects of the illegal opium industry activities, and poor infrastructure and institutions," the IMF said after meetings with Afghan officials from November 8-22.
It said a drop in opium cultivation in 2005 was largely overwhelmed by higher yields due to good weather, which also boosted overall agricultural output. Construction and services activities also remain buoyant, the IMF said.