PMR report: Good prognoses for dentistry services market
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In 2019-2024, a gradual slowdown in GDP growth is forecast, but its dynamics will continue to be above 2.8% y/y over the entire forecast horizon. This is 0.3 p.p. higher than PMR predicted at the beginning of 2018. Therefore, the overall forecast for the dentistry services market is higher than in 2018.
500+ and thirteenth pension programmes will drive the growth of dentistry?
GDP growth will be driven mainly by private consumption (supported by rising wages and low unemployment) as well as by investment. The improving situation of households (e.g. an increase in disposable income, or the above mentioned increase in wages and low unemployment) will contribute to an increase in expenditure on dental services. Moreover, the existing and newly introduced government programmes, such as the extension of the 500+ programme or the “thirteenth pension” programme, may also have a positive reflection.
After years of growth, in the final years of the forecast, the general inflation rate is expected to remain stable at a constant level (around 2.3% y/y). Rising prices in the economy, coupled with higher wages in the health sector and strong demand pressures for private dental services stemming from improving living conditions of the population, will contribute to a further increase in the price index of dental services (by 3-4% annually, according to our forecasts) and thus have a positive impact on the value of the dental services market.
The potential of the dentistry services market is not fully exploited
In particular, the announced increase in the share of health care expenditure as a share of GDP is an additional factor supporting future public expenditure on dental treatment in particular. It is worth noting that market growth will take place despite a downward trend in the prevalence of caries.
It is worth noting that at present the market potential is not fully exploited – the factors limiting the growth are the lack of sufficiently high revisions in valuations for child and youth benefits and the lack of revisions for other dental benefits. In both the public and private sectors, labour shortages and limited opportunities for specialisation will remain. This will not have a positive impact on the increase in the provision of increasingly complex (and more expensive) services on a larger scale.