The resources that a country allocates to healthcare compared to the size of the overall economy vary over time due to differences in both the growth of health spending and overall economic growth. During the 1990s and early 2000s, EU countries generally saw health spending outpace the rest of the economy, leading to a nearly continual rise in the ratio of health expenditure to gross domestic product (GDP). However, this trend was disrupted by the financial and economic crisis of 2008/09. The COVID‑19 pandemic also led to fundamentally diverging growth patterns of health spending and economic output, resulting in a major adjustment of this indicator.
In 2022, 10.4% of the GDP of the EU was devoted to healthcare (Figure 5.3). With 12.6%, Germany dedicated the highest share of its economic output to health, followed by France and Austria (over 11% of their respective GDP). Belgium, Sweden and Portugal also spent 10.5% or more of their GDP on health. The lowest shares of the overall economic output allocated to health were recorded in Luxembourg (5.6%), Romania (5.7%), Ireland (6.1%) and Poland (6.4%). Across Europe, Switzerland and the United Kingdom were additional high spenders on health (with shares at over 11%), while Türkiye allocated the lowest share (3.7%).
Between 2015 and 2019, health expenditure per capita growth was broadly in line with GDP per capita growth in EU countries (Figure 5.4), with both indicators averaging an annual growth rate of around 3% in real terms. Consequently, health expenditure as a share of GDP remained relatively stable over the same period in many countries, at around 10% across the EU.
The period 2019 to 2022, characterised by the COVID‑19 pandemic and associated economic turmoil, saw disruptions to the health expenditure‑to-GDP ratio. In 2020, lockdown measures and restrictions on economic activity led to a contraction of GDP per capita of nearly 5% across EU countries. However, the rollout of vaccination programmes across Europe and the easing of COVID‑19 restrictions allowed GDP to recover strongly in 2021. At the same time, the pandemic brought a new array of direct and indirect costs for the health sector, associated with the treatment and management of COVID‑19 patients, the scaling up of treatment capacity, and ensuring the continuation of routine care. Annual growth in per capita health expenditure reached a rate of nearly 6% in 2020 and growth accelerated to 9.6% in 2021 across EU countries (Figure 5.4). As a result, health expenditure as a share of GDP jumped by 1 percentage point to 10.9% in 2020 across the EU, continuing into 2021.
Hopes for a return to more stable economic conditions in 2022 were dented by Russia’s war on Ukraine and widespread disruptions in supply chains, on top of the lingering effects of COVID‑19. This placed upward pressure on prices, especially for energy and food, leading to inflation levels not seen for decades and a slowdown in GDP growth (OECD, 2023[1]). These economic and geopolitical challenges affected countries’ ability to fund health spending. At the same time, countries were emerging from the acute stage of the pandemic and rolling back COVID‑19 measures. Consequently, health spending per capita fell on average by 3.7% in real terms across EU countries, causing the health spending-to-GDP ratio to also fall to 10.4% in 2022 across the EU.
The trajectory in the health expenditure‑to-GDP ratio of selected EU economies, such as France, Italy, Germany and Spain, has followed closely the EU-wide trend. From 2015 to 2019, the ratio in these countries remained stable, with minor fluctuations not exceeding half a percentage point. However, a significant increase was observed in 2020. In Spain, the health spending-to-GDP ratio surged by 1.6 percentage points to from 9.1% in 2019 to 10.7% in 2020. In France, Italy and Germany this increase was more limited at around 1 percentage point. In 2021, this indicator increased further in France and Germany while decreasing in Italy and Spain. In 2022, the health expenditure as a share of GDP declined in all of the four selected countries (Figure 5.4).
