PRAGUE (Reuters) - Southern Africa faces severe economic costs
from the HIV/AIDS epidemic sweeping the region and will require
international help to alleviate the problem, the International
Monetary Fund said in its latest World Economic Outlook.
The costs, which some studies reckon will lead to a drop in
annual economic growth rates of 1-2 percentage points, will
exacerbate human suffering and social disruption and risk a
vicious cycle of poverty and disease, the IMF said. "The
HIV/AIDS problem in southern Africa is already of enormous
dimension and...it is clear that these countries will require
considerable external assistance to address it," the report
"To prevent the situation from deteriorating further, it will
be critical to reduce the rate of new infections," the IMF
said, citing some success in preventative measures in Uganda
The IMF said that by 2010 gross domestic product (GDP) per
capita in the worst affected countries could be 5% lower than
it would be without the effects of the disease.
It said even this number will underestimate the welfare cost
because GDP per capita does not account fully for the human,
social and pecuniary costs of HIV/AIDS.
"The epidemic creates a vicious cycle by reducing economic
growth which leads to increased poverty which, in turn,
facilitates the rapid spread of HIV/AIDS as household food and
health spending declines thereby reducing resistance to
The disease affects all forms of the economy from the direct
impact on the labor force to the effect on government budgets
from the cost of additional healthcare to lower savings rates,
the IMF said.