Real GDP growth rates and health care spending – Comparison between the G7 and the EM7 countries

Abstract

Abstract Background: Accelerated globalization has substantially contributed to the rise of emerging markets worldwide. The G7 and Emerging Markets Seven (EM7) behaved in significantly different macroeconomic ways before, during, and after the 2008 Global Financial Crisis. Average real GDP growth rates remained substantially higher among the EM7, while unemployment rates changed their patterns after the crisis. Worldwide economic growth began to accelerate again, starting from year 2017. However, approximately one half of this growth is attributable to the EM7, while only a quarter to the G7 nations. This paper aims to analyse the association between the health spending and real GDP growth in the G7 and the EM7 countries.Results: In terms of GDP growth, the EM7 exhibited higher degree of resilience during the 2008 Global Crisis, compared to the G7. Unemployment in the G7 nations was rising significantly, compared to pre-recession levels, but, in the EM7, it remained traditionally high. In the G7, the austerity (measured as a percentage of GPD and in PPP basis) significantly decreased the public health expenditure, even so in than in the EM7. Out-of-pocket health expenditure grew at far more concerning pace in the EM7 compared to the G7 during the Crisis, exposing vulnerability of citizens and households living close to poverty line. Regression analysis demonstrated that, in the G7, real GDP growth had positive impact on out-of-pocket expenditure measured as a percentage of current health expenditure expressed as a percentage of GDP (CHE). In the EM7, it affected negatively CHE, CHE per capita in PPP in constant 2011 international USD, and out-of-pocket expenditure per capita in PPP international USD. Conclusion: The EM7 countries showed stronger endurance withstanding the consequences of the global economic crisis as compared to the G7 economies. Evidence of that were most visible in real growth rates and unemployment rates, before, during, and after the crisis. It influenced health spending patterns in both groups, although they tended to diverge instead of converging in several important areas.