Dhruv Moondra
3 March 2025

You may not know this but obesity is one of the most pressing and growing issues of our world economy today. Under the spell of mainstream media, people’s awareness of the world’s problems has been narrowed down to just climate change and world peace. However, as of 2019 itself, the economic cost of obesity and being overweight was 2.19% of global GDP and the problem is only expected to rise with lower-income countries expecting to see their economic costs rise by 12 to 25 times between 2019 and 2060. 

But what makes obesity so dangerous? The answer stems from a multitude of repercussions that all add up to create a massive hole in the economy. 

One such repercussion is the impact on productivity. 

You see, the reason why an economy can function is because there are people available to produce the goods and services demanded by consumers. Therefore if a country’s workforce is more productive, it will be able to produce more goods and services with reduced average costs, allowing the GDP to grow. However, if an increasing percentage of the workforce suffers from obesity, it worsens their health, reducing their ability to produce output. For instance, due to the increased likelihoods of injury or sickness, obese individuals take up to 3 more sick days per year. Additionally, obesity also reduces on-the-job productivity as it impairs work performance and causes difficulties performing physically demanding tasks. This is why in 2016, productivity losses alone cost the US economy up to $26.8 billion. 

Moreover, another direct consequence of obesity is healthcare costs. Globally, annual medical expenditures are 137% higher for obese people compared to others. This takes away a huge part of a household’s disposable income, reducing their ability and willingness to spend in the economy, and limiting economic growth. Another issue is that if governments provide free healthcare, it puts a strain on the healthcare system, lowering the quality of necessary medical aid, a basic necessity, to others. Consequently, a lot of the taxpayers’ money is lost towards repairing this negative externality, money that could have been used for the production of merit goods like education and infrastructure. This situation is seen in the US where obesity’s share of government healthcare expenditure will nearly double between 2015 and 2025. 

Even so, there are much greater social costs for those in less developed countries where people have to pay their healthcare bills. People with obesity are often the ones with the most serious health conditions and account for the majority of patients with diabetes and cardiovascular diseases. These require enormous treatment costs which many are simply unable to afford. For instance, India’s title of ‘the diabetes capital of the world’ forced 10% of all diabetes patients below the poverty line in 2013, causing hardships for many.  

What’s more, the healthcare industry hugely profits from obesity cases resulting in an inequitable distribution of wealth as companies raise their profits at the expense of impoverished customers. This is evident in the average profit margin of the pharmaceutical industry which is 23%. 

Lastly, there are many more hidden costs of obesity on standards of living. Obesity greatly decreases one’s mental well-being as it is associated with feelings of rejection, shame and depression. As a result, obese individuals are 30-70% more likely to develop a mental illness. Additionally, they often face many physical limitations in life, curtailing their ability to maximise their quality of life.  

So what can be done?

Given that world obesity rates are expected to reach 51% by 2035, governments need to step up their efforts to solve this social and economic problem. 

1. Countries should implement a sugar or fat tax that can lower the overconsumption of unhealthy, ultra-processed foods in society. This has already witnessed a massive success in Mexico. 
2. Another policy that must be implemented is restricting the promotion of foods high in fat, sugar or salt. This can help reduce excess demand for food products that are socially undesirable.
3. Finally, aside from awareness and promotional campaigns, the government can also provide subsidies to encourage the consumption of healthy food, thus eliminating economic losses from productivity declines and healthcare costs on the workforce. 

In conclusion, obesity poses a significant and often overlooked threat to global economies, impacting productivity, healthcare systems, and individual well-being.  Addressing this crisis requires decisive government action, including targeted taxation, advertising restrictions, and subsidies for healthy food choices, to mitigate the escalating economic and social costs

Works Cited:
https://www.perplexity.ai/search/how-does-obesity-impact-the-gl-Zo2FAWrDQTuzPI67PYbOYQ