The Macroeconomic Impact of Hiv/Aids in Botswana

43 Pages Posted: 14 Feb 2006

See all articles by Maitland MacFarlan

Maitland MacFarlan

International Monetary Fund (IMF)

Silvia Sgherri

International Monetary Fund (IMF)

Date Written: June 2001

Abstract

This paper provides an overview of the potential macroeconomic effects of HIV/AIDS in Botswana, focusing on the key channels through which the pandemic is likely to affect the economic outlook and on the uncertainties involved. To estimate the impact of HIV/AIDS, a dual-economy equilibrium model is constructed and simulated under different scenarios. Depending on exactly how AIDS affects the outlook, GDP growth is projected to fall from around 5½ percent a year without the pandemic to between 1½ and 2½ percent a year with AIDS. Non-negligible redistribution effects across sectors and labor skill categories are also likely to arise. Finally, the paper draws attention to the potential effects of HIV/AIDS on the long-term fiscal position of Botswana, highlighting the need for increased international support and/or lower drug prices so that the widespread introduction of anti-retroviral drug treatments is feasible.

JEL Classification: O41, O55, J11

Suggested Citation

MacFarlan, Maitland and Sgherri, Silvia, The Macroeconomic Impact of Hiv/Aids in Botswana (June 2001). IMF Working Paper No. 01/80, Available at SSRN: https://ssrn.com/abstract=879601

Maitland MacFarlan (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Silvia Sgherri

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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