| Post date: Mon, Apr 16, 2018 | | Category: Health | |
Inflation has a negative implication on the value of expenditure in the health sector. This blog examines the value of the expenditure at market prices (nominal) and compares this with the inflation corrected trends (real) for the government investment in the health sector at the national level.
Trends in Real versus Nominal Health Expenditure trends (Ksh billion)

Source: KIPPRA
Number of the week: 2 percentage points. Growth rate in Real health expenditure is 2 percentage points lower than nominal spending
The four year analysis shows that actual spending in the health sector has been on the increase moving from Ksh 37 billion in 2014/15 to Ksh 55 billion in 2017/18, representing an annual increase of approximately 12%.
On the other hand, real spending increased from Ksh 30 billion in 2014/15 to Ksh 42 billion in 2017/18, representing 10%.
Inflationary pressure, though marginal, may affect the real value of the investments in health.
Policy options for the government is to continue using monetary tools to keep the inflation a low levels. The spending in health should also be matched with the inflationary pressures in order to maintain the purchasing power of the consumers in the sector.

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