Publication: At a Crossroads: Prospects for Government Health Financing Amidst Declining Aid
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2025-11-18
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2025-11-18
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Investing in health is one of the most powerful drivers of human capital formation, economic growth, and job creation. However, low- and lower-middle-income countries are at a crossroads with growing economic uncertainty and sharp cuts to external aid. This report–part of an annual series–monitors the latest trends and provides an outlook on government and donor health spending in these countries. Government health spending remains well below the minimum needed to achieve universal health coverage (UHC) and has stagnated since 2018. Most LICs (80%) and many LMICs (40%) are projected to face a decline in combined government and donor health spending by 2030 as sharp cuts to development assistance for health—projected to decline by around 20%—offset modest growth in government spending. However, countries have policy options to alter their trajectories by spending better and spending more on health under fiscal constraints. Crucially, aid-dependent countries have a reform window to restructure and reshape their health systems in line with domestic priorities as aid dwindles. And it is feasible to raise the share of government spending on health in a third of LICs and LMICs—they have the fiscal space and underprioritize health compared to peers. While the challenge may appear daunting, bold reforms will deliver rapid gains by saving lives, creating jobs, and driving economic growth.
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Kumar, Anurag, Jacopo Gabani, Alberto Marino, Julio Cesar Mieses Ramirez,
and Patrick Hoang-Vu Eozenou. At a Crossroads: Prospects for Government Health Financing Amidst Declining Aid. Government Resources and Projections for Health (GRPH) Series. Washington, DC: World Bank, November 2025. https://hdl.handle.net/10986/43745
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