Afghanistan is expected to experience a 7% economic decline due to severe reductions in US foreign aid,  a report by the Centre for Global Development (CGD).

The country, identified as one of eight nations most reliant on US assistance, previously received more than one-fifth of its foreign aid from the US Agency for International Development (USAID), which accounted for 35% of all international assistance to Afghanistan. However, that money is now stopped due to Donald Trump's decision to shut down the agency and pull all foreign aid funding across Asia, apart from exemptions later announced for life-saving humanitarian assistance.

Over the past three years, the US has contributed more than $3bn in aid to Afghanistan, solidifying its position as the nation’s largest financial donor.

Despite these exemptions, an analysis by IntelliNews, citing UN Financial Tracking Service data, reveals that no US humanitarian aid payments have been made to Afghanistan through the UN in 2025. This is while the US had committed $29mn and pledged an additional $234mn for Afghanistan’s humanitarian needs in 2025 before the cuts.

"In the low-income countries; the World Bank’s International Development Association (IDA) is the largest non-US provider in the majority, with the EU the largest in Afghanistan and Eritrea," the study announced. 

The funding freeze has disrupted critical UN programmes, including reproductive health services for nine million Afghan women, as reported by the United Nations Population Fund (UNFPA). Dozens of aid organisations have shut down, exacerbating economic instability, currency volatility, and rising costs of essential goods.

In January, Trump said the ongoing US financial aid to Afghanistan should be contingent upon the return of the American military equipment left in this country after the US 2021 withdrawal of its troops.

The Taliban, who swept to power immediately after the US exit, turned down the request, asserting the equipment was Afghan property and were needed to combat terrorist groups. Much of that equipment, including helicopters, was purposefully broken by US troops before their departure from the country; however, in some cases, Afghan technicians have managed to get some of the equipment moving. 

Reports also indicate that some US financial assistance has been diverted to the Taliban rather than reaching its intended beneficiaries.

John F. Sopko, former Special Inspector General for Afghanistan Reconstruction (SIGAR), has noted that the US provided over $3.7bn in aid to Afghanistan under Taliban rule, with a significant portion allegedly benefiting the ruling group, which is still not recognised as the legitimate government by any country.

US Congress representative Tim Burchett has also claimed that $40mn per week is still reaching the Taliban-controlled government, though Taliban officials deny access to foreign funds.