Health Financing Update in Lao PDR : Technical Note (English)

This technical note aims to provide a brief update on the health financing situation in Lao PDR and to identify critical constraints and opportunities facing the health financing system in the rapidly evolving country context. The COVID-19 pandemic, and, more recently, the war in Ukraine as well as domestic economic problems such as the depreciation of the currency and increasing public debt, have changed the global and national health financing landscape significantly. Globally, the pandemic has introduced more uncertainties regarding the growth outlook and longer-term development of fiscal space of advanced economies, especially for those economies where the response to COVID-19 was financed by large budget deficits. It is unclear to which extent the repercussions from COVID-19 and from the war in Ukraine might shift fiscal space away from external assistance for health and, to a lesser degree, change policy focus of donors, e.g., towards preparedness for global health emergencies, which might crowd out available funding for other purposes. These developments, alongside the direct economic impact of COVID-19 in Lao PDR itself and the global and domestic economic situation, also significantly frame the circumstances of domestic financing in the coming years. In addition to reviewing and updating the health financing situation, the technical note also includes a closer look on sustainability challenges for immunization services as a marker for health financing constraints in the face of rapidly reducing external financing. The health financing analysis will be further updated as part of the Human Capital Review to assess the role of public financing for health in protecting human capital.