Impact of the COVID-19 pandemic on the relationship between economic growth and health expenditure

This study examines the relationship between health spending and economic growth across 158 countries from 1990 to 2022, with a focus on the impact of the COVID-19 pandemic, particularly from 2020 to 2022. The gross domestic product per capita (GDPC) growth rates increased across all income groups during 2020-2022, with rising health expenditure as a driver in middle- and low-income countries. Health expenditure positively impacts GDP per capita in middle- and low-income countries. However, health expenditure has a significantly rising trend in high-income countries (HIC), underscoring the importance of steady health investment for economic resilience. Upper middle-income countries (UMIC) benefit considerably over the long term, but pandemic-related effects are not significant and inconsistent, highlighting the need for adaptive spending and structural reforms in demographics, insurance systems, and poverty. Health spending supports growth in lower-middle-income (LMIC) and low-income countries (LIC) despite the COVID-19 disruptions. Economic growth also boosts health investment in HIC and UMIC during 2020-2022,2020, and 2022 in LMIC, suggesting mutual reinforcement, and does not find such effects in LIC. Adaptive spending and structural reforms are also required for demographics, insurance, and foreign direct investment in LMIC and LIC.