The current global financial crisis ishaving a substantial impact in Europe and Central Asia (ECA)where economic growth is beginning to dip, unemployment isrising and government revenues are being cut. The GrossDomestic Product (GDP) growth rate of the region isprojected to decline by 4.7 percent in 2009 and the flow ofremittances is also expected to slow down sharply, causingparticular hardship to low-income groups. While countrieswith fiscal capacity have adopted stimulus packages topromote economic recovery, most ECA countries arefinancially constrained and have revised their governmentbudgets, including in the health sector. Thus, as a resultof the crisis, public spending on health may actuallydecrease in absolute amounts and in percentage of GDP. Thehealth sectors in most ECA countries are mainly financedfrom public sources. In countries with low levels of publicspending on health3, the majority of health services arepaid for by patients. Any reductions in public healthspending would thus only add to the out-of-pocketexpenditures of patients, and may negatively affect accessto care, particularly for the poor. There is increasingempirical evidence that public sector spending improveshealth indicators in low-income and transition countries,particularly in countries that have good governance systemsin place.
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