Investigating the Nexus between Government Health Expenditure and Growth Across SAARC Nations

Abstract Exploring the nexus between government healthcare expenditure and economic growth remains a critical area of inquiry. Existing literatures consistently highlights an opposite relationship between Infant Mortality Rate (IMR) and GDP per capita, underscoring the importance of health outcomes in shaping economic performance. In this context, the present paper explores the nexus between public health expenditure and economic growth across SAARC nations, using secondary data from the World Development Indicators. Employing panel regression techniques and various statistical tools, the analysis reveals that Domestic General Government Health Expenditure (DGGHE), IMR, and Life Expectancy at Birth (LEB) exert a statistically significant positive influence on GDP per capita in the region. Conversely, Labour Force (LF) was found to have no significant impact on GDP per capita, potentially reflecting underutilization of labour resources within SAARC economies. On the basis of the findings, it has been recommended to increase government investment in the health sector and strategic initiatives to enhance labour force participation and productivity.