Officials expect hundreds of thousands of refugees to return from Pakistan and Iran this year
* Number of Afghans needing aid up 13 percent from last year
* New request for aid would help 5.7 million Afghans
* Aid groups often get only a fraction of funding requests
By Josh Smith
KABUL, Jan 18 (Reuters) - International aid groups needs more than a half a billion dollars this year to help millions of Afghans struggling with increased violence and a bleak economy, as a humanitarian crisis worsens, a senior U.N. official told Reuters.
The United Nations estimates at least 9.3 million Afghans, or nearly a third of the population, will need humanitarian assistance in 2017, a 13 percent increase from last year.
Officials expect hundreds of thousands of refugees to return from Pakistan and Iran this year, even as an average of 1,500 people are newly displaced by fighting every day, said Mark Bowden, the U.N. humanitarian coordinator for Afghanistan.
"The majority of people returning are very poor ... and have lost a lot," he said on Wednesday in an interview at his office in Kabul.
An increasing number of people in Afghanistan are facing prolonged displacement, Bowden said, creating more challenges for the government, which is already struggling to provide basic services while battling a stubborn insurgency waged by the Taliban and other militant groups.
The 2017 Humanitarian Response Plan, set to be launched by the United Nations and other organisations on Saturday, calls for $550 million to help about 5.7 million of the most vulnerable people.
Such funding requests routinely only meet a fraction of the target, with $197 million received for last year's annual request of $339 million. An additional emergency appeal last year for $152 million to help more than a million refugees returning from Pakistan and Iran, as well as people newly displaced by fighting, raised just over $91 million.
"The major impact is that we're not able to address the needs of displaced people as adequately as we want," Bowden said.
Afghanistan remains heavily dependant on foreign aid, and the prolonged conflict has kept most private investment away, with disastrous effects for the economy, he said.
Prior to the U.S.-led international military force withdrawing most of its troops in 2014, officials had been predicting that gross domestic product would grow by as much as 12 percent per year, reducing the need for humanitarian aid, Bowden said.
Instead, the conflict has worsened and annual GDP growth hovers around 1 percent, undermining efforts to wean the country's "distorted economy" off foreign aid, he said.
(Reporting by Josh Smith; Editing by Randy Fabi)
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