Government Health Spending Outlook - Projections Through 2029

Executive Summary

This paper examines the implications of the IMF’s April 2024 macro-fiscal forecast updates on government health expenditure (GHE) across 170 economies through 2029. The findings reveal significant disparities in governments' capacities to increase health spending, with differences observed both across and within income groups.

Key Points:

1. Diverging Fiscal Pressures:

   • The first group of low- and lower-middle-income countries is projected to experience a contraction in real per capita GHE from 2019 to 2029.
   • The second group of these countries faces stagnation in real per capita GHE, severely limiting progress toward health SDG targets.

2. Uneven Constraints:

   • These disparities are driven by a combination of macroeconomic crises, inflation, and debt distress.
   • The first group of countries is particularly vulnerable due to existing fiscal constraints and new shocks.

3. Navigating Difficult Choices:

   • Increasing the priority of health in spending alone will not be sufficient.
   • Effective responses require improvements in spending efficiency and addressing broader fiscal challenges.

4. Time for a Rethink:

   • Without decisive action, many countries have little chance of achieving the health SDGs.

Detailed Analysis

General Government Expenditure

• General Government Per Capita Expenditure: The paper shows a trend from increases to declines to modest growth in general government per capita expenditure.
• Country-Specific Trends: Countries exhibit diverging trajectories in terms of GGE growth.

Contraction Countries

• These countries are expected to see a decline in real per capita GHE, reversing progress toward health SDG targets.

Stagnation Countries

• These countries face stagnation in real per capita GHE, limiting advancement towards health SDG targets.

Expansion Countries

• Some countries are experiencing modest growth in real per capita GHE, indicating a more favorable fiscal situation.

Distribution of Countries Across GGE Growth Categories

• The distribution of countries across GGE growth categories is uneven, reflecting varying fiscal pressures and constraints.

Conclusion

The paper underscores the need for a comprehensive approach to address the fiscal challenges faced by governments in increasing health spending. Effective policies must include improvements in spending efficiency and broader fiscal reforms to ensure progress toward health SDG targets.