The latest health developments reveal troubling trends in government health spending across low-income and lower middle-income countries, posing risks to public investments in health. Achieving the SDG health targets is increasingly challenging, emphasizing the need for decisive action to address mounting financing challenges. The World Bank Group is committed to assisting countries in delivering quality health services to 1.5 billion people by 2030.
Per capita government health spending peaked during the early stages of the COVID-19 pandemic but has since declined steadily in LICs and LMICs. The erosion of growth momentum in health investments has been exacerbated by deprioritization of health amid growing budgets, leading to modest annual growth rates below pre-pandemic levels. Urgent action is required to ensure that necessary growth in government health spending is sustained to achieve the health SDGs by 2030.
Projections through 2029 indicate varying fiscal pressures across countries, with some expected to experience substantial growth in government expenditure while others face constraints limiting health spending. The divergence in fiscal capacities poses challenges to achieving health-related SDGs by 2030, necessitating a critical reassessment of financing approaches and fiscal reforms to navigate macro-fiscal headwinds.
During the initial COVID-19 response, central government health expenditures surged in developing countries. However, a subsequent decline in health spending post-2021 has raised concerns about progress towards health-related SDGs. Governments need to prioritize health spending to avoid setbacks, especially in the face of emerging variants and service disruptions.
The global economic shocks from the pandemic and geopolitical events like the Russian invasion of Ukraine have widened rifts in government capacity to invest in health. Rising interest payments on public debt further constrain health spending, particularly in low- and lower-middle-income countries. Immediate action is necessary to prevent setbacks in health and economic recovery.
The “From Double Shock to Double Recovery” series by the World Bank Group examines government health spending trends and outlooks, providing insights into sustainable financing pathways towards health SDGs amidst ongoing challenges. Policy options are explored to secure financing for health investments in the face of macro-fiscal pressures.
These developments underscore the critical need for countries to prioritize health in their budgets, improve spending efficiency, and implement comprehensive fiscal reforms to ensure progress towards health-related SDGs. Without bold policy shifts and increased development aid, many countries risk falling behind in health security, human capital development, and economic growth.
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